Building California schools now big business, big money and big politics
Building and refurbishing the schools that house 6 million California kids has become very big business.
Over the last few decades, the state has issued about $45 billion in school bonds, mostly for K-12 schools, some for colleges, and repaying lenders costs the state nearly $3 billion a year. With interest, retiring the bonds will have cost about twice their face value, or some $90 billion.
Local school districts have issued many billions more in voter-approved bonds to match state grants, and property taxes have been hiked to pay for them.
The school construction tab is likely to increase even more because a $9 billion bond issue has been placed on the Nov. 8 ballot by a coalition of school groups, developers and the construction companies that profit from school contracts.
If it passes, the state’s tab for repayment would increase by another half-billion dollars a year, and Gov. Jerry Brown has been highly critical, saying the system for allocating bond money is fatally flawed.
Pointedly, the bond measure, Proposition 51, preserves an arcane formula that protects developers from having to fully pay for school construction serving their residential tracts as long as the state has bond money.
In a sense, therefore, it preserves a subsidy from taxpayers – or, taking the contrary view, avoids making housing prices even higher than they are now.
Another very questionable aspect of Proposition 51 is that bonds repaid over 35 years may be used for reroofing, air conditioning, playground equipment and other maintenance and operational projects that won’t last nearly that long.
There is another aspect to the school construction picture.
Last week, state Treasurer John Chiang and county treasurers jointly declared that if municipal bond houses – the firms that underwrite bond issues – provide campaign money or other assistance to local school bond issues, they will be barred from doing bond business with the state.
“Not only are these pay-to-play arrangements unlawful, they rip off taxpayers and endangerBuilding California schools now big business, big money and big politics | The Sacramento Bee: