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Economy, Other Factors Bring School Bond Glut To Ballots
Wednesday, October 17, 2012
Ron Bennett, president and CEO at School Services of California, Inc.
Kyla Calvert, KPBS education reporter.
San Diego County and the state are seeing a surge of school bonds on November's ballot. San Diego Unified's is the largest of 106 across the state.
SAN DIEGO When San Diego County voters look at their November ballots most will see at least one school bond measure. Some will see as many as three.
That’s because 11 county school districts and community colleges have bonds on the ballot – the most in any one election since at least 1990. More than 100 districts are seeking bonds statewide.
The largest bond in the county, and the state, is San Diego Unified’s Proposition Z. The district is asking voters to raise their property taxes to pay for $2.8 billion in borrowing and repayment costs.
School districts can use voter-approved long-term bonds to fund facility construction and repair and, so long as it is spelled out in the list of bond projects, some equipment and furnishings.
Lora Duzyk, assistant superintendent of business services of the San Diego County Office of Education, said there is at least one simple reason so many districts are hoping to get 55 percent of voters to say "yes" to new bonds.
“There is no money available at the state or very, very little," she said. "So any kinds of renovations, anything that they need to do with their facilities, they have to go to the people because they don’t have any operating dollars or dollars from the state to do this.”
In 2009 the state rolled funding set aside for maintenance costs into general funding for school districts to give administrators more flexibility with diminished funds. Legislators also reduced the amount districts had to save for repairs.
San Diego Unified got voters to approve another bond, Proposition S, just four years ago. But the recession undermined the housing values borrowing for that bond program relied on.
“If a house was worth $400,000 when Proposition S was passed, and maybe generating $240 a year in tax revenue, that house might only be worth $300,000 now and generating only $180 a year," said Scott Barnett, vice president of the San Diego Unified Board of Education. "So there’s less revenue available to pay off the Proposition S bonds.”
Barnett said without a new bond, projects under the old bond will stop, or the district will have to use riskier forms of debt that count on housing values skyrocketing in the future.
But that doesn’t satisfy Chris Cate at the San Diego County Taxpayers Association. He said many of the projects, like repairing building facades or improving athletic fields, were supposed to happen under the last bond.
“We would ask them to actually finish the projects first before coming back and asking the voters for more money,” he said.
Three other bonds on San Diego County ballots are efforts to raise more revenue in areas where property values have fallen and brought previous bond projects to a halt. The South Bay Union, Cajon Valley and Dehesa School Districts are seeking new taxes to support the borrowing voters approved under the districts' last bonds.
But even when districts have the money to fund repairs, Duzyk said bonds for facilities upgrades are inevitable, especially now.
“No matter how much work you do facilities continue to wear overtime and they constantly have to be modernized, upgraded and there’s infrastructure issues if you’re moving into technology,” she said.
Upgrading school technology was part of San Diego schools’ last bond and it’ll be part of the next bond, too. Barnett said those are costs the district didn’t even know would exist when it drew up a long-term facilities plan almost 20 years ago.
“Out of $380 million we spent of Prop S to date, $100 million has been spent on computer, back of the house technology, wireless, wiring and all of that and about $40 to $50 million has been spent on actual computer technology,” he said.
Cate believes that spending on things like computers and iPads should raise a red flag for taxpayers when they consider Proposition Z.
“They’re doing the same thing again and granted, the technology is important. But should you be funding iPads and laptops with 40 year bonds," he said. "That is not sound fiscal policy.”
Barnett pointed to the 60 percent of San Diego Unified students who qualify for free or reduced-price lunch, who would not have access to laptops or iPads unless those devices were provided by schools as the reason bond funds should support devices with life spans of less than a decade.
All 11 of the bonds voters will weigh in on during this election include spending on technology. Some may cover only technology infrastructure like wiring, others would also fund the purchase of computers and devices.
Tough budget situations may be pushing San Diego and other school districts to the ballot box this November. But Duzyk said this isn’t a bad time to borrow. Borrowing and construction costs are down.
“They can get more for their money if they can get money now," she said "plus the long-term interest rates -- this is a great time. It’s an opportunity for them to borrow at a lower cost and also get the building done that they need at a cheaper cost.”
With two dueling statewide tax increases on the ballot, school districts are still betting voters will see value in borrowing for school construction and repair now.
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