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Support for School Bonds Declining
The impact of multimillionaires’ Prop 39...

[by Jon Coupal] 1/10/06

Though more local school bonds are passing, voter support for these measures is in decline.

This seeming contradiction can be understood by looking at the impact of Proposition 39 passed by voters in 2000. That year, a small group of multimillionaires and billionaires, most from the Silicon Valley, spent more than $60 million on a campaign to lower the vote threshold for the passage of local school bonds that only property owners are obligated to repay.

Jon Coupal

Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association -- California's largest taxpayer organization with offices in Los Angeles and Sacramento. [go to website] [go to Coupal index]

The two-thirds vote for local bonds was established in the California Constitution of 1879 in recognition of the fact that not everyone who voted was obligated to pay the tax. The two-thirds vote was intended to guarantee a strong community consensus before taking on long-term debt which placed a lien on all property within the district. The two-thirds vote was also justified by the fact that today's voters were not only taxing themselves, but future generations.

Proposition 39 changed the entire dynamic. First, at the ballot box, those who have no tax liability can now more easily overwhelm the property owners who do. Second, the same level of care and attention previously put into bond proposals to maximize support is no longer necessary since passage has become almost automatic. Third, now that school district officials have found out how easy it is to pass bonds, we are seeing many cases where they are coming back with a second, or even a third bond in just a few short years.

In the five years since the passage of Proposition 39, there has been a total of 365 Prop. 39 bond measures with 320 of those measures passing (88% pass rate). There have also been 75 traditional two-thirds vote bond measures (17% of all local bond measures) with 39 of those measures passing (52% pass rate). (Some school districts opt for the traditional two-thirds vote bonds because there are no limits to the amount of indebtedness sought to be approved). The combined total has been 440 total measures with 359 passing (82% pass rate).

The total amount of bonds approved since the passage of Proposition 39 has been $39.38 billion with $37.34 billion of that amount coming from Prop. 39 bond measures.

Of the 440 combined total number of bond measures, 171 (or 39%) passed with less than a two-thirds vote. The total bond amount represented by these 171 Prop. 39 affected measures is $23.93 billion.

Evaluation of the November 2005 ballot reveals a change in the level of support for school bonds, although the pass rate is higher than ever. There were 36 local school bonds on the November ballot with 31 of those measures passing (86% overall pass rate). Of the 36 measures, 31 of the measures (86%) were Prop. 39 bond measures. Of the 31 Prop. 39 bond measures, 28 ended up passing (90% pass rate).

While education leaders and the tax-and-spenders have been citing these high passage rates of local bonds on the November 2005 ballot as justification for greater public support for public education, the real reason why the passage rates were so high is because of the significantly lowered passing standard under Prop. 39. Only 36% of the local education bond measures on the November 2005 ballot received a two-thirds vote. In the five-year period just prior to the passage of Prop. 39 in 2000, more than 60% of the local bond measure received a two-thirds vote. The median support percentage (median "yes" percentages) were also significantly higher during the aforementioned 5-year period compared to the November 2005 elections.

The numbers reveal an electorate that is starting to get irritated with all these local bonds, especially from districts that have proposed multiple measures. Of the 5 districts that were pursuing their second or third Proposition 39 bond measure this last November, none cleared the two-thirds vote hurdle, although all ended up passing with less than a two-thirds vote.

Although members of the "Billionaires Boys Club" that backed Proposition 39 have pledged to defend its more liberal bond passing standard with their last discretionary dollar, pressure for relief is building. It may be that property owners will be forced to defend themselves through an initiative that, at a minimum, limits the frequency that school bonds can be placed on the ballot in any one district. CRO

copyright 2006 Howard Jarvis Taxpayers association



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