The proceeds from the $9 billion in bonds that would be issued if voters approved Proposition 51 would be stored in a 2016 State School Facilities Fund and a 2016 California Community College Capital Outlay Bond Fund.
The California Public School Facility Bonds Initiative, also known as Proposition 51, will be on the Nov. 8, 2016, ballot in California as an initiated state statute.
• A “yes” vote supports the state issuing $9 billion in bonds to fund improvement and construction of school facilities for K-12 schools and community colleges.
• A “no” vote opposes the state issuing $9 billion in new debt to fund the improvement and construction of education facilities.
Bond Money Purposes
The proceeds from the $9 billion in bonds that would be issued if voters approved Proposition 51 would be stored in a 2016 State School Facilities Fund and a 2016 California Community College Capital Outlay Bond Fund. Proceeds would be allocated for the following purposes:
• $3 billion for the construction of new school facilities
• $500 million for providing school facilities for charter schools
• $3 billion for the modernization of school facilities
• $500 million for providing facilities for career technical education programs
• $2 billion for acquiring, constructing, renovating, and equipping community college facilities.
Total Cost of the Bonds
The state's legislative analyst estimated that the $9 billion in bonds would cost $17.6 billion to repay. The fiscal impact statement estimated $8.6 billion in interest. The statement also stated that the bonds would cost the state approximately $500 million per year.
Since 1914, 42 education-related bond measures have appeared on the ballot in California, and all of them were legislatively-referred. In 2014, legislators tried to place a legislatively-referred bond act that called for $9 billion for school maintenance and construction on the ballot. The legislation passed the California State Assembly, but Gov. Jerry Brown opposed it before it could pass the California State Senate, and so it did not qualify for the 2014 ballot. The California Public School Facility Bond Initiative will be the first education-related bond measure to appear on the ballot since 2006, and it is the first ever education-related bond measure that was citizen initiated.
The ballot title is: School Bonds — Funding for K-12 School and Community College Facilities Initiative Statute.
The long-form ballot summary is as follows:
• Authorizes $9 billion in general obligation bonds: $3 billion for new construction and $3 billion for modernization of K-12 public school facilities; $1 billion for charter schools and vocational education facilities; and $2 billion for California Community Colleges facilities.
• Bars amendment to existing authority to levy developer fees to fund school facilities, until new construction bond proceeds are spent or Dec. 31, 2020, whichever is earlier.
• Bars amendment to existing State Allocation Board process for allocating school construction funding, as to these bonds.
• Appropriates money from the General Fund to pay off bonds.
The shorter ballot label summary is as follows: Authorizes $9 billion in general obligation bonds for new construction and modernization of K-12 public school facilities; charter schools and vocational education facilities; and California Community Colleges facilities.
The long-form, official ballot summary for Proposition 51 was identical to the initial summary provided to initiative proponents for the purpose of circulating the initiative for signature collection.
Fiscal Impact Statement
The fiscal impact statement for a California ballot initiative authorized for circulation is jointly prepared by the state's legislative analyst and its director of finance.
It is estimated that it will cost the state about $17.6 billion to pay off both the principal ($9 billion) and interest ($8.6 billion) on the bonds. These payments of about $500 million per year will last for 35 years.
For more information, visit https://oag.ca.gov/.
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