Legislative supporters of putting a multibillion-dollar school construction bond on the fall ballot kicked off efforts Monday to pass the measure by the end of next week, with California’s largest homebuilding group warning that the state otherwise faces a “nuclear option” of more expensive homes.
State voters last passed a school bond in 2006, and the program has been virtually out of money since 2012. Bond legislation cleared the Assembly unanimously earlier this year. Gov. Jerry Brown, though, has been cool to the idea, writing in his January budget proposal that any revived school construction program needs to “avoid an unsustainable reliance” on state debt.
Bond supporters say they will try to change the governor’s mind. Monday, the pro-bond Coalition for Adequate School Housing started running TV and radio ads. Proponents said a new bond would improve students’ learning experience and create construction jobs.
“I understand where the governor’s coming from,” said Assemblywoman Joan Buchanan, D-Alamo, the author of AB 2235, acknowledging Brown’s concerns about the state’s finances and indebtedness. “I also think there is a time when you have to make investments ... in California’s long-term economic future. The kids are there today. I can’t tell Johnny to come back in five years when the school is going to be built.”
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The official deadline for the Legislature to place measures on the fall ballot was June 26, but proponents estimated Monday that they could still get a school bond before voters if they act by Aug. 15. It’s one of two borrowing measures in the mix during the Legislature’s final month of session, with lawmakers also rushing to craft a smaller replacement for a $11.1 billion water bond already on the November ballot.
An earlier version of AB 2235 called for a $9 billion school bond. Monday, Buchanan said her legislation will be amended this week to be in the range of $4 billion to $5 billion.
Homebuilding groups backing the bond say it would help meet customers’ demands for good schools. In addition, a bond would would prevent the doubling of school-impact fees on home construction, which could add as much as $1 billion statewide in higher fees annually, based on 2013 construction levels.
Under the 1998 law that overhauled California school construction, money to build and modernize classrooms comes from a mix of local borrowing, school-impact fees charged on new homes, and state bonds. But if the state money ever dries up, the 1998 law requires the impact fees to double from “Level 2” to “Level 3.” The increase was poised to kick in for the first time in 2012, but Brown signed budget legislation that suspended the higher fees for two years, buying time for lawmakers to negotiate a school bond.
That hasn’t happened, and the fee suspension expires Sept. 1.
“If the Legislature hasn’t taken action to put a bond on the 2014 ballot, we are at the point where the process to begin triggering level 3 would begin to roll out,” said Richard Lyon, a lobbyist for the California Building Industry Association. Lyon called this “the nuclear option.”
The potential hit varies by school district. In the West Placer Unified School District, for example, total school-impact fees on a 2,100-square-foot home would increase from an estimated $9,198 to $18,396. Dave Cogdill, a former lawmaker who is now CEO of the building association, said builders could absorb little, if any, of the increase, without passing the rest on to buyers. He warned that scenario would set back the state’s fragile housing recovery.
Cogdill said the bond would revive a school-construction program that has worked “very, very well.” “We only have one critic, and that’s the governor,” he said.
Brown has said little publicly about a possible school bond. The governor spoke at an industry trade show in June and, according to Cogdill, downplayed the possibility of a school bond this year but said he would address the Level 3 fee issue. The building association would push to extend the 2012 postponement law if no borrowing measure advances to the ballot, Cogdill said.
A Brown spokesman said Monday that the governor’s office had no comment on the legislation.