Governor Brown Releases 2017-18 May Revision

May 11, 2017

This morning Governor Jerry Brown released his 2017-18 May Revision. This update will focus on school facilities including Proposition 39. We will provide more detail on other key school facilities issues such as the bond sale amount, specific audit provisions, DIR prevailing wage monitoring program language, and state agency staffing levels as they become available. Click here to view the full revision summary.

School Facilities
At this time, it appears that the Governor is not proposing any significant changes to K-12 school facilities. The following is a quote from the 2017-18 May Revision regarding the implementation of Proposition 51:

K-12 School Facilities – A 2016 audit of Proposition 1D School Facilities Program expenditures issued by the Office of State Audits and Evaluations determined that 1,533 projects, representing over $3 billion in Proposition 1D funds, have been completed without ensuring the bond funds were appropriately expended. The audit found instances in which school districts inappropriately used school facilities bond funding to purchase vehicles, tractors, tablets, golf carts, mascot uniforms, and custodial/cleaning supplies. To ensure the appropriate use of all School Facilities Program bond funds and effective program accountability and oversight, the Administration proposed the following two-fold approach in the Governor’s Budget:

  • Design grant agreements that define basic terms, conditions, and accountability measures for participants that request funding through the School Facilities Program.
  • Enact legislation requiring facility bond expenditures to be included in the annual K-12 Audit Guide, where independent auditors verify that local educational agencies participating in the School Facilities Program have appropriately expended state resources.

The Office of Public School Construction has presented a comprehensive grant agreement to the State Allocation Board for approval, and the Administration has proposed legislation to required independent audits of school facilities expenditures. It is anticipated that the State Allocation Board will take action on a final grant agreement at its next meeting. As stated in the Governor’s Budget, the Administration will support the expenditure of Proposition 51 funds when both the grant agreement and audit requirement are in place to ensure that taxpayers’ dollars are spent appropriately.” (Page 19)

Proposition 39 – The California Clean Energy Jobs Act was approved by voters in 2012, and increases state corporate tax revenues. For 2013-14 through 2017-18, the measure requires half of the increased revenues, up to $550 million per year, be used to support energy efficiency projects. The May Revision decreases the amount of energy efficiency funds available to K-12 schools in 2017-18 by $46.7 million to $376.2 million to reflect reduced revenue estimates.” (Page 20)

CASH Position
CASH is disappointed that the Department of Finance (DOF) has not taken action to sell Proposition 51 bonds to fund high priority local school construction and modernization projects. If the State Allocation Board (SAB) approves the recommendations by the Office of Public School Construction (OPSC) and the DOF at their May 24, 2017 meeting, it would have negative and lasting effects on school districts seeking state bond funding for $2.4 billion in project funding and will be in direct violation of the law. These recommendations are contrary to the provisions of Education Code Chapter 12.5 and are specifically preserved by the unambiguous language of Proposition 51 approved by the majority of California voters. CASH believes that this may not be changed by fiat as intended by the OPSC and DOF.

~ CASH Staff