Construction Unions Could Grab Billions Through Education Bonds

Among the many Californians who only occasionally vote in elections, how many understand what they’re doing when they vote for a “bond measure” for a K-12 school district or community college district? They know it’s “for the kids,” but do they know that when they authorize a school district to sell bonds to fund construction, it is borrowing money from institutional investors and wealthy individuals? Do they consider the cost implications, such as how this borrowed money must be paid back – with interest – directly through the taxes of property owners and indirectly through rent and lease payments to landlords?

Presidential elections attract the highest voter turnouts, and as a greater number of people vote, a higher proportion of them are a little fuzzy on some of the policy details. They tend to vote on emotional impulses and are more likely to respond favorably to simple arguments such as “it’s for the kids.” It’s conventional wisdom among California political consultants that voters in Presidential general elections tend to be more likely than voters in primary or off-year elections to approve ballot measures that authorize bond sales.

Perhaps that explains why the November 6, 2012 election includes the highest number of ballot measures ever recorded authorizing California’s K-12 and community college districts to borrow money for construction by selling bonds. As reported by School Services of California and reprinted on September 26, 2012 by the Coalition for Adequate School Housing (CASH) as “K-14 School Facility Bonds Dominate the Ballot,” it’s going to be an election that brings huge new debt burdens to the people of California through authorized bond sales:

School agencies have qualified 106 school facilities ballot measures worth a total of $11.6 billion for the November election. This eclipses the previous high number of measures, 96, which occurred in November 2008. Included within that total are two traditional general obligation (GO) bonds requiring a two-thirds majority vote for passage and 104 Proposition 39 measures requiring a 55% majority approval. The measures are broad-based, including eight community college elections and four school facility improvement district (SFID) elections. They also extend to every corner of the state.

The article also makes some election predictions:

If past trends hold true, more than 70% of the school agency measures on the ballot will pass. But every election is different, and in this one, voters are faced with a hotly contested presidential election, two major school funding measures, a number of high-profile, very controversial measures, and we are still caught in the throes of economic malaise. Our prediction, therefore, is that voters will go to the polls and support passage of these measures and that the results will be even better than recent history would suggest. Our experience is that when times get tough, voters are much more likely to take matters in their own hands and turn to the local ballot box, not the state, for support for their children.

Obviously, $11.6 billion in taxpayer money (not including state matching grants) attracts special interests looking to get themselves a guaranteed piece of the action. These interests, of course, include construction trade unions.

So which of California’s K-12 school districts and community college districts with bond measures for construction on the November 2012 ballot have a history of requiring their construction contractors to sign Project Labor Agreements (PLAs) with trade unions as a condition of working on projects funded by bond measures? Quite a few:

Also, some of the projects to be funded by the San Ramon Valley Unified School District’s $260 million proposed bond measure were at one time covered under a developer-negotiated Project Labor Agreement for electrical and plumbing work. That agreement reportedly contained a successor clause to continue coverage after the project was transferred from the developer to the school district.

In addition, school boards of three other school districts with bond measures on the November 6, 2012 ballot have been lobbied aggressively in the past by union officials for a Project Labor Agreement. These will certainly remain targets for Project Labor Agreements:

Finally, the Stockton Unified School District approved a resolution in 2007 requiring contractors to obtain apprentices from eligible state-approved training programs that have “graduated apprentices annually for at least the past five (5) years.” The policy was aimed at non-union (and union) apprenticeship programs that the state might approve in the future to compete against existing union apprenticeship programs. Apprentices in those new programs would not be allowed to get on-the-job training on Stockton Unified School District construction projects.

If predictions are correct about the November 2012 election results for bond measures, construction unions throughout the state will have plenty of work guaranteed through government-mandated Project Labor Agreements and other tricky arrangements to get union monopolies on taxpayer-funded construction. Keep in mind that many of these school districts will also obtain matching grants for these projects from the State Allocation Board – grants funded by bond sales totaling $35.8 billion authorized by three past statewide propositions:

• The $13.1 billion Kindergarten-University Public Education Facilities Bond Act of 2002 (Proposition 47, approved by 59.1% of voters in November 2002)
•  The $12.3 billion Kindergarten-University Public Education Facilities Bond Act of 2004 (Proposition 55, approved by 50.9% of voters in March 2004)
•  The $10.4 billion Kindergarten-University Public Education Facilities Bond Act of 2006 (Proposition 1D, approved by 56.9% of voters in November 2006)

Want more documentation? Below is a list of Project Labor Agreements that contractors have been required or will be required to sign to work on school construction, along with links to the actual agreements.

Government-Mandated Project Labor Agreements for K-12 School and Community College Construction Projects

Project Labor Agreements Negotiated by Private Parties for K-12 School and Community College Construction Projects

Kevin Dayton is the President and CEO of Labor Issues Solutions, and is the author of frequent postings about generally unreported California state and local policy issues at .