Legislature reaches agreement on statewide school facilities bond; Governor yet to endorse

After months of negotiations, it was announced on June 30 that the State Assembly and Senate reached an agreement on a statewide school facilities bond.

Assembly Bill 247, titled the Kindergarten through Grade 12 Schools and Local Community College Public Education Facilities Modernization, Repair, and Safety Bond Act of 2024, proposes to place a $10 billion statewide school facilities bond on the upcoming November 2024 general election ballot. If approved by Gov. Gavin Newsom and adopted by voters, K-12 public schools will receive $8.5 billion and community colleges will receive $1.5 billion. Among its provisions, the bond includes important wins for CSBA advocacy, especially accommodations made for small and rural school districts that often do not have the resources to apply for and access competitive facilities funding.

Announced alongside the school facilities bond was the intent to place a $10 billion Safe Drinking Water, Wildfire Prevention, Drought Preparedness, and Clean Air Bond Act on the November 2024 general election ballot. In total, the two proposals would amount to the state issuing $20 billion in bonds.

Earlier this year, after the state passed Proposition 1 on the March primary ballot, there was a meeting between Gov. Newsom, Senate President Pro Tem McGuire (D-Healdsburg) and Assembly Speaker Rivas (D-Hollister) to discuss the state’s bonding capacity. After that meeting, Speaker Rivas announced that the state is able to issue approximately $15-$16 billion worth of statewide bonds. It is not yet clear whether the Governor is in agreement with placing the two bonds on the November ballot.

During the two-year 2023–24 session, the Legislature has been considering two measures, Assembly Bill 247 by Assemblymembers Al Muratsuchi (D-Torrance) and Mike Fong (D-Alhambra) and Senate Bill 28 by Sen. Steve Glazer (D-Orinda). The primary difference between the two competing measures was the inclusion of bond funding for the California State University and the University of California systems, which was included in SB 28 but not in AB 247. CSBA is in support of both measures, but preferred AB 247, the version that the Legislature will take up this week.

Both measures were introduced in 2023 and were on hold until this year when the Governor announced during his January Budget Proposal that he would be engaging with the Legislature to negotiate the placement of a statewide school facilities bond on the November 2024 general election ballot.

The Legislature had until June 27 to reach an agreement; however, additional negotiations were required so the deadline was extended to July 3. An agreement was needed by June 30 in order to allow the bond legislation to be in print for three consecutive days before the Legislature could vote upon it, as required by law.

The main elements of the K-12 public school portion will be split into the following programs and amounts:

  • New construction: $3.3 billion
  • Modernization: $4 billion, $115 million of which will be set aside for testing water for lead and remediation efforts
  • Career technical education: $600 million
  • Charter schools: $600 million
Greater considerations for low-wealth districts

The bond also includes a number of changes to provide additional resources for lower wealth and small school districts This includes a scale for how school districts with lower property values can receive increased funding for new construction and modernization projects. Using a sliding scale — based upon a district’s ability to generate local funds and their proportion of low income, foster care and English learner students — it increases funding for new construction projects from 50 percent to 55 percent and from 60 percent to 65 percent for modernization projects.

It also increases the cap on bonding capacity for districts qualifying for financial hardship grants from $5 million to $15 million and adds an annual inflation adjuster that increases the cap over time. This will increase the number of school districts that can qualify for financial hardship funding over time, helping to expand access to school districts with little to no bonding capacity

Additional permissions for new construction and modernization projects

Included in the proposed bond are permissions for school districts to use new construction and modernization funds for kitchens, preschool classrooms, health facilities, broadband infrastructure and structures to help protect students from high temperatures.

Small school district prioritization

Most notably, and in large part because of CSBA’s advocacy, the bond includes additional priorities for small school districts, including:

  • Establishing a process to help provide small school districts with technical assistance.
  • Providing a prioritization for small school districts that have a low bonding capacity and high percentages of youth in foster care, homeless youth and English learners.
  • Setting aside 10 percent of the new construction ($330 million) and modernization ($400 million) grant funding for small school districts.

These provisions are largely a byproduct of CSBA’s sponsorship of AB 2831 (Hoover, R-Folsom), which would help small school districts meet the needs of their students, staff and boards of education by establishing an Office of Small School District Facilities and Construction within the California Department of Education (CDE). The bill would also require CDE, upon request of a small school district, to provide assistance in the evaluation and utilization of existing school facilities and the justification of the needs of school sites, new facilities and the rehabilitation or replacement of existing facilities, in accordance with board regulations. It would require this assistance to include annually informing small school districts of the availability of state school facilities funding for which they may qualify and responding to requests for assistance in identifying and determining state requirements to become eligible and apply for state facilities funding. Many of these provisions are now included in the language for the school facilities bond, representing a victory for small school districts, generally defined as those with an average daily attendance of 2,500 or less, and almost 60 percent of the districts in California.

Buildings that are 75 years or older

The school bond will also establish a program to help school districts receive increased new construction funds to demolish and replace buildings that are 75 years or older. This is in place of funding the rehabilitation of these types of buildings where repairs may be excessive and may not be able to meet the educational needs of today’s students.

Four supplemental grants included

The bond will also include a number of supplemental grants for the following purposes:

  • Minimum essential facilities: Permitting eligible districts to receive one supplemental grant for a school kitchen, gymnasium, multipurpose room or library if either the existing facility is insufficient or the school does not have such a facility.
  • Transitional kindergarten (TK): For the first time a statewide school bond allows eligible school districts a supplemental grant if existing TK facilities are insufficient or they do not have an existing facility to serve TK students.
  • Extreme heat/energy efficiency: Permits a supplemental grant of up to 5 percent for new construction or modernization projects to enable a school district to respond to and address the impacts of higher temperatures on school facilities.
  • Career technical education: Permits a supplemental grant of up to 5 percent for new construction or modernization projects to help provide instruction for “high-demand technical careers.”
Accountability and transparency

The agreement includes a number of elements to address accountability and transparency. These include requiring school districts to hold a public hearing and adopt a five-year facilities master plan, which includes providing an inventory of facilities to the state and posting project and audit information to their websites.

What’s next

AB 247 must be passed by the Legislature and signed by the Governor by July 3 for it to meet the deadline for placement on the November 2024 general election ballot. As such, it will be fast-tracked through the Legislature this week before members go on their summer recess on July 3.

At its May Delegate Assembly meeting, CSBA Delegates voted to support a statewide school bond if and when it appeared on the ballot. CSBA will keep members apprised of developments on the bond.