Capitol Alert

Voters approved a $9 billion school bond, but Gov. Jerry Brown is not ready to spend it

Jerry Brown: California avoided budget deficit through cuts, new taxes

Gov. Jerry Brown said California was facing a budget deficit in the 2017-18 fiscal year, so the state must be careful about its fiscal condition. Video courtesy of California Channel.
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Gov. Jerry Brown said California was facing a budget deficit in the 2017-18 fiscal year, so the state must be careful about its fiscal condition. Video courtesy of California Channel.

Gov. Jerry Brown, who last year registered deep skepticism about the $9 billion statewide school construction bond, is withholding the proceeds until the Legislature approves more rigorous independent auditing procedures.

The Democratic governor exercised his power over the purse by issuing a proposed budget this week that dangles nearly $300 million from bond sales but requires front-end grant agreements spelling out the basic terms, conditions and accountability measures for all K-12 applicants.

Voters in November passed Proposition 51, which was supported by real estate and development companies and top school officials, despite repeated criticism from the governor.

He had disparaged the bond as a “blunderbuss effort that promotes sprawl and squanders money that would be far better spent in low-income communities.”

The measure gives the upper hand to wealthy campuses, he said, because “It says, ‘Hey, if you’ve got your application ready, you’ll be first in line,’ and that will favor the more affluent and the more resourced districts.”

Michael Cohen, Brown’s finance director, said the bond furthers an overly complex and bureaucratic system, in which more than 10 state entities review and approve funding.

“It encourages the building of new schools, rather than fixing existing ones,” Cohen added.

And so the administration isn’t ready to spend the money immediately.

At his budget unveiling Tuesday, Brown told reporters he would try to “make it work in the fairest way possible.”

“We want to make sure that the rules, consistent with the bond act, will work to take care of those most in need,” he said.

Gov. Jerry Brown said California was facing a budget deficit in the 2017-18 fiscal year, so the state must be careful about its fiscal condition. Video courtesy of California Channel.

Once a bond is authorized, the money doesn’t become available until bonds are sold, which for the state typically happens in the spring and fall each year. Brown’s budget anticipates going into the market this fall.

Delaine Eastin, a candidate for governor who spent time in the Legislature and served as the state’s schools chief from 1995 until 2003, urged the Brown administration to act quickly because “the voters were asked to vote on a bond and that is the bond that should be instituted.”

Eastin said she spent years working to streamline school projects, calling the tangle of bureaucracy “notoriously slow” and “not a new problem.”

“He needs to be more nimble,” Eastin said. “What we can’t do is poke the people in the eye and extend the (process) because we are not doing our job over here. … The voters spoke. Do it in high gear; not in low gear.”

Some of 165 projects worth $370 million, previously reviewed by the Office of Public School Construction, cannot get the money until Brown’s conditions are met.

“The voters have spoken and 51 has passed,” said H.D. Palmer, a spokesman for Brown’s Department of Finance.

But “that doesn’t mean (Brown’s) concern over fiscal accountability on spending school bond funds is in any way lessened or diminished,” he added.

Palmer pointed to a report last year by finance officials that looked at spending under Proposition 1D, the $10.4 billion bond passed by voters in 2006.

The Office of State Audits and Evaluations found that 1,533 K-12 projects representing more than $3 billion were closed without an audit to determine compliance, eligibility or financial savings. A limited review of districts found cases in which districts inappropriately used bond money to buy everything from tractors and golf carts to iPads and a mascot uniform.

Bond supporters said this week that they didn’t anticipate significant delays in developing the Brown-required procedures. Dave Walrath, a veteran education lobbyist, called the requests “fairly straightforward,” adding that they could be expedited through the budget process. All of the language for related bills must be sent to the Legislature by Feb. 1.

“We want to work with the administration to make sure their concerns are addressed to get this done as soon as possible,” Walrath said.

Christopher Cadelago: 916-326-5538, @ccadelago

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