Voters statewide to decide on $15B bond for education facility projects

Voters statewide are casting their ballots to determine whether to approve Proposition 13, a $15 billion bond to fund public school district, community college and state university facility development and modernization projects.

The Long Beach Unified School District Board of Education adopted a resolution in support of the bond, which could bring as much as $330 million in state funds for projects in local schools, said district spokesman Chris Eftychiou.

“We have 85 schools and we have been working diligently to upgrade our facilities, but the need is still great,” he said.

Prop. 13 is the end result of Assembly Bill 48, dubbed the Public Preschool, K-12, and College Health and Safety Bond Act of 2020. Authored by Assemblyman Patrick O’Donnell, D-Long Beach, the bill was signed by Gov. Gavin Newsom in October, effectively placing the proposition on the March 3 ballot.

If approved, Prop. 13 would allocate $9 billion for K-12 facilities, including $500 million each for career technical education and charter school facilities. The bond also includes $6 billion ($2 billion each) for community college, California State University and University of California facilities.

Local bonds are often paid for by increasing property taxes, while state bonds are repaid out of the general fund. The state’s Legislative Analyst’s Office estimates Prop. 13 to cost around $26 billion, which includes 35 years of interest accrual. Approximately $740 million—or 0.5% of the state’s general fund—would be used annually to repay Prop. 13 bonds.

The leading opponent of Prop. 13 is the Howard Jarvis Taxpayers Association, led by President Jon Coupal. In a Feb. 18 op-ed published on EdSource, Coupal called for voters to reject the proposition, saying it would ultimately lead to local governments raising property taxes.

“Under this Prop. 13, the caps on local bond debt would go from 1.25% of assessed property value to 2% for elementary and high school districts,” Coupal wrote, “and from 2.5% to 4% for unified school districts and community college districts.”

By increasing the caps on local bond debt, Coupal noted that previously authorized bonds that put debt over the cap could be issued. Additionally, new local education-based bond measures, which require 55% approval to pass, could be placed on future ballots. Coupal argued that increased local bond debt repayment would fall squarely on property owners through increased taxes.

With the ever-looming housing shortage throughout the state, legislators included a provision in Prop. 13 that would prohibit school districts from assessing developer fees on multifamily residential developments located within a half-mile of major transit stops, such as light rail. For all other multifamily developments, allowable developer fee levels would be reduced to 20%.

“New housing construction drives the need for new school buildings,” Coupal noted. “Why should the developers of new housing get a special tax break while existing property owners, who have been paying for school bonds all along, are asked to pay more?”

The limitations on developer fees would be in place until Jan. 1, 2026.

Critics have also pointed to a recent audit by the state into the California Lottery, which is supposed to provide funnel money to schools in proportion to net revenue increases. The audit found that the state lottery has not increased its education funding, which resulted in a $36 million shortfall for fiscal year 2017-18. According to the California Lottery website, it gave $1.7 billion—equal to about 1% of the state’s annual budget for public schools—during that fiscal year, and $34.2 billion since 1985.

Numerous education-based associations and unions support Prop. 13, including the California School Boards Association, the California Teachers Association, the California Federation of Teachers, the California State University Board of Trustees, the Community College League of California and the California Charter Schools Association. Dozens of state legislators also support the bond, including Sen. Lena Gonzalez, who represents most of Long Beach.

Approximately 71% of the CSU system’s 23 campuses are at least 40 years old, with 23% being more than 60 years old, according to Cal State Long Beach. Future needs for CSULB include $3.5 million in renovations for Horn Center classrooms, an $8.77 million water heating replacement project, $1 million for shelter-in-place classroom locks and a nearly $140 million new-construction project to replace Peterson Hall 1, which is 60 years old and listed on the CSU Seismic Review Board’s Priority 2 list.

Long Beach City College has submitted two projects for Prop. 13 funding: $37 million for the renovation of classrooms in Building B at the Liberal Arts Campus and over $118 million for the construction of a new 150,000-square-foot classroom building on the Pacific Coast Campus.

Long Beach residents previously approved bond measures to modernize and expand local schools: the $1.2 billion Measure K in 2008 and the $1.5 billion Measure E in 2016. Since 1998, California voters have approved five bond measures for school facilities: Prop. 1A (1998), Prop. 47 (2002), Prop. 55 (2004), Prop. 1D (2006) and Prop. 51 (2016). The state propositions total nearly $54 billion for K-12 and higher education facilities, with the last passing with 55% of the vote.

“Prop. 13 would help us to make significant upgrades to our schools and would allow us to stretch our locally approved school bonds further,” Eftychiou said.

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Brandon Richardson is a business reporter, covering everything from real estate and healthcare to the airport and port to city hall and the economy. He is a Long Beach native who has been with the Business Journal since graduating from Long Beach City College in spring 2016 with an associate’s degree in journalism. He is an avid record collector and concert goer.