Governor Proposes Minimum Funding for School Construction and Modernization Projects

January 10, 2018

The proposed State Budget for 2018-19 was released on January 10 at 10:00 a.m. The following is the statement that relates to school facilities in the proposed 2018-19 State Budget (Page 30):

Since 1998, voters have approved approximately $44 billion in statewide general obligation bonds to construct or renovate public school classrooms used by the state’s roughly six million K-12 students. Associated General Fund debt services costs are over $2 billion annually. In addition to general obligation bonds, school districts may use developer fees, local bonds, certificates of participation, and Mello Roos bonds to construct additional classrooms or renovate existing classrooms.

The recently approved Kindergarten through Community College Public Education Facilities Bond Act of 2016 (Proposition 51) authorizes $7 billion in state general obligation bonds for K-12 schools to be allocated through the current School Facilities Program in place as of January 1, 2015. To ensure appropriate usage of all School Facilities Program bond funds and effective program accountability and oversight, the Administration worked with the State Allocation Board and the Office of Public School Construction to revise policies and regulations to implement front-end grant agreements that defined basic terms, conditions, and accountability measures for participants that request funding through the School Facilities Program. To complement this front-end accountability, legislation requiring facility bond expenditures to be included in the annual K-12 Audit Guide was approved.

 The Budget proposes approximately $640 million in bond authority for 2018-19 to fund new construction, modernization, career technical education, and charter facility projects based upon the Office of Public School Construction’s processing of project applications and the State Allocation Board’s approval of these projects.”

The Governor is also proposing to spend $1 billion from SB 5 bonds, if they are approved in the June Primary.  SB 5 has $4 billion in bond authorization, so he is proposing to spend 25% of that bond.  If he spent 25% of Proposition 51 bond funds it would be $1.5 billion of the $6 billion New Construction and Modernization funds.  Even at 25%, that $1.5 billion would cover only half of the application backlog ALREADY submitted to the Office of Public School Construction. Because the $640 million dribbles out from the voter approved Proposition 51 bond over a decade long schedule, the backlog will grow every year while needed school projects remain unfunded.  The Governor’s priorities are clear.  Yet-to-be approved funds receive 25%, while already shovel ready bond projects receive 11%.  The numbers speak for themselves.

We did what the Governor wanted with the audit language and upfront agreement.  Even with these provisions, it appears the Governor does not want to honor the voters’ will because the voters did not follow his opposition to Proposition 51.

As we continue to review the Governor’s proposed State Budget, we will drill down in more depth on issues of interest to the school facilities community and report to the CASH membership.  Stay tuned.

~ Dave Walrath, Legislative Advocate