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Unions Seek Control of Recent California School Bond Measures

Has California school and community college facility construction become a perpetual government stimulus program for politically-favored construction trade unions?

Prop 39 BannerFifteen years ago, it was obvious that many school and college districts in California needed new construction, modernization, or renovation of their facilities for the safety and comfort of students, teachers, administrators, and support staff. That’s why 53% of California voters approved Proposition 39 in November 2000. It reduced the threshold for voter approval of school bond measures from two-thirds to 55%, increasing the passage rate for educational bond measures from under 50% to more than 80%.

But the purpose of borrowing money for school construction seemed to evolve after the 2008 economic collapse and subsequent November 2008 election.

Debt started piling up from relentless and repeated bond sales to investors. The “need” for more construction seemed immeasurable and unquenchable. Scandals began to pop up as clever people began to figure out how to manipulate the loopholes and ambiguities in ten year-old state laws regarding finance and construction of educational facilities.

Meanwhile, construction trade unions became much more aggressive in trying to monopolize educational construction by lobbying elected school board members for Project Labor Agreements. And local school and college elected boards became much more willing to grant those union monopolies.

Local elected officials in California recognized that political circumstances had changed. To quote a San Diego Unified School District board member immediately before the 3-2 vote on May 26, 2009 for a Project Labor Agreement:

I think the bigger picture that people are realizing – and this is what scares some people – is that San Diego is changing, the United States is changing…this is a different city…we are looking at a different community.

What has resulted from this change? A lot of debt has been imposed on future generations of Californians.

The California Policy Center released a report in July 2015 entitled For the Kids: California Voters Must Become Wary of Borrowing Billions More from Wealthy Investors for Educational Construction. This report identified $146 billion in authorized borrowing from 2001 to 2014 for California educational facility construction and $200 billion in existing debt service from bonds sold to pay for California educational facility construction.

In response to this report, some taxpayer advocates have asserted that momentum for additional local educational bond measures is propelled by construction trade unions that see local education districts as ripe targets to accumulate a pool of guaranteed government work. Union leaders remain nervous about the state’s economic prospects. They don’t want a painful revival of membership unemployment rates of 25%-50% experienced from 2009 to 2012.

Is this argument valid?

Below is a list of all of the K-12 school and college bond measures approved by voters in the last four primary and general elections (in 2012 and 2014) that became targets of construction unions for a government-mandated Project Labor Agreement (PLA).

 

Bond Measures Approved by Voters in June 2012

 

Amount Authorized to Borrow Name of School or College District Voter Approval Percentage Project Labor Agreement Activity
West Valley-Mission Community College District

$350,000,000

59.8%

Board approves PLA for upcoming “pilot project” 8/20/13.

Milpitas Unified School District

$95,000,000

64.1%

Board approves PLA 12/11/12.

Bond Measures Approved by Voters in November 2012

 

San Diego Unified School District

$2,800,000,000

61.8%

PLA approved in 2009 extends to this bond measure.

Coast Community College District

$698,000,000

57.2%

Board votes 5/15/13 to end consideration of a PLA.

Oakland Unified School District

$475,000,000

84.4%

PLA approved in 2004 extends to this bond measure.

Santa Monica-Malibu Unified School District

$385,000,000

68.1%

Board discusses PLA 11/20/14.

Board votes for contract to negotiate PLA 4/16/15.

West Contra Costa Unified School District

$360,000,000

64.4%

PLA approved in 2000 extends to all bond measures.

Cerritos Community College District

$350,000,000

70.3%

Board discusses PLA 4/16/14 and 6/4/14.

Solano Community College District

$348,000,000

63.5%

Board approves PLA 12/4/13.

Sacramento City Unified School District

$346,000,000

70.1%

Board votes 1/23/14 to extend PLA approved in 2005 to this bond measure.

Rancho Santiago Community College District

$198,000,000

72.6%

Board approves PLA 3/24/14.

Alum Rock Union Elementary School District

$125,000,000

79.5%

Board approves PLA 6/18/13.

East Side Union High School District

$120,000,000

71.6%

Revised PLA approved in 2009 extends to this bond measure.

Lynwood Unified School District

$93,000,000

57.4%

Board approves PLA 2/12/13.

Inglewood Unified School District

$90,000,000

86.1%

Board approves PLA 10/26/12.

Chula Vista Elementary School District SFID No. 1

$90,000,000

68.8%

Board approves negotiations for a PLA 4/15/15.

Oxnard School District

$90,000,000

66.4%

Board approves PLA 6/24/15.

Sacramento City Unified School District

$68,000,000

67.9%

Board votes 1/23/14 to extend PLA approved in 2005 to this bond measure.

Antioch Unified School District SFID No. 1

$56,500,000

62.8%

Board approves PLA 11/13/13.

Whittier City Unified School District

$55,000,000

72.4%

Board approves PLA 1/13/15.

Washington Unified School District

$22,000,000

72.8%

Board imposed a union-backed apprenticeship requirement for contractors and used it to disqualify non-union company from contract.

Bond Measures Approved by Voters in June 2014

 

Fremont Unified School District

$650,000,000

61.2%

Board approves negotiations for a PLA 8/12/15.

Contra Costa Community College District

$450,000,000

57.6%

Board approves PLA 10/10/12 for all projects of $2 million or more.

Culver City Unified School District

$106,000,000

76.3%

Community Budget Advisory Committee discusses PLA 5/27/15.

Bond Measures Approved by Voters in November 2014

 

Santa Clara Unified School District

$419,000,000

69.4%

Board discusses PLA 3/26/15.

PLA discussion scheduled for 8/13/15.

Sonoma County Community College District

$410,000,000

63.1%

Union officials have openly declared intent to lobby for a PLA.

College administrators have met with legal counsel regarding PLA.

San Mateo County Community College District

$388,000,000

66.2%

Board discusses PLA 7/8/15.

Norwalk-La Mirada Unified School District

$375,000,000

57.4%

Board discusses PLA 3/25/15.

San Luis Obispo County Community College District (Cuesta)

$275,000,000

62.6%

Board discusses PLA 2/4/15.

Board voted down PLA negotiations at 3/4/15 meeting.

Hayward Unified School District

$229,000,000

77.4%

Board votes for PLA 6/24/15.

Vacaville Unified School District

$194,000,000

62.0%

Board discusses PLA 3/9/15.

Board votes for PLA negotiations 6/25/15.

Alameda Unified School District

$179,500,000

62.8%

PLA discussion scheduled for 8/11/15.

Santa Rosa High School District

$175,000,000

64.0%

Union officials have openly declared intent to lobby for a PLA.

Salinas Union High School District

$128,000,000

60.3%

Board discusses PLA 3/24/15 and 5/12/15.

Board votes for PLA negotiations 5/26/15.

East Side Union High School District

$113,200,000

67.9%

PLA that applied to Measures G and E amended – apparently administratively – to cover Measure I.

Azusa Unified School District

$92,000,000

56.2%

Board discusses PLA 3/17/15.

Pittsburg Unified School District

$85,000,000

68.5%

Ballot arguments against the bond measure focused on PLAs imposed on previous bond measures; supporters’ rebuttal defended the PLAs.

Berryessa Union School District

$77,000,000

69.3%

Board votes for contract to negotiate PLA 3/10/15.

Santa Rosa Elementary School District

$54,000,000

69.1%

Union officials have openly declared intent to lobby for a PLA.

Washington Unified School District

$49,800,000

67.4%

Board imposed a union-backed apprenticeship requirement for contractors and used to disqualify non-union company from contract.

Bassett Unified School District

$30,000,000

62.4%

Board voted for PLA negotiations 1/20/15.

 

Kevin Dayton is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

California's $12.3 Billion in Proposed School Bonds: Borrowing vs. Reform

“As the result of California Courts refusing to uphold the language of the High Speed Rail bonds, the opponents of any bond proposal, at either the state or local level, need only point to High-Speed Rail to remind voters that promises in a voter approved bond proposal are meaningless and unenforceable.”
–  Jon Coupal, October 26, 2014, HJTA California Commentary

If that isn’t plain enough – here’s a restatement: California’s politicians can ask voters to approve bonds, announcing the funds will be used for a specific purpose, then they can turn around and do anything they want with the money. And while there’s been a lot of coverage and debate over big statewide bond votes, the real money is in the countless local bond issues that collectively now encumber California’s taxpayers with well over $250 billion in debt.

Over the past few weeks we’ve tried to point out that local tax increases – 166 of them on the November 4th ballot at last count, tend to be calibrated to raise an amount of new tax revenue that, in too many cases, are suspiciously equal to the amount that pension contributions are going to be raised over the next few years. For three detailed examples of how local tax increases will roughly equal the impending increases to required pension contributions, read about Stanton, Palo Alto, and Watsonville‘s local tax proposals. It is impossible to analyze them all.

As taxes increase, money remains fungible. More money, more options. They can say it’s for anything they want. And apparently, bonds are no better.

At last count, there are 118 local bond measures on the November ballot. And not including three school districts in Fresno County for which the researchers at CalTax are “awaiting more information,” these bonds, collectively, propose $12.4 billion in new debt for California taxpayers. All but six of these bond proposals (representing $112 million) are for schools. Refer to the list from CalTax to read a summary of what each of these bonds are for – “school improvements,” “replace leaky roofs,” “repair restrooms,” “repair gas/sewer lines,” “upgrade wiring,” “renovate classrooms,” “make repairs.”

To be fair, there are plenty of examples of new capital investment, “construct a new high school,” for example, but they represent a small fraction of the stated intents. On November 4th, Californians are being asked to borrow another $12.3 billion to shore up their public school system. They are being asked to pile another $12.3 billion onto over $250 billion of existing local government debt, along with additional hundreds of billions in unfunded retirement obligations for state and local government workers. They are being asked to borrow another $12.3 billion in order to do deferred maintenance. We are borrowing money to fix leaky roofs and repair restrooms and sewers. This is a scandal, because for the past 2-3 decades, California’s educational system has been ran for the benefit of unionized educators and unionized construction contractors who work in league with financial firms whose sales tactics and terms of lending would make sharks on Wall Street blush. These special interests have wasted taxpayers money and wasted the educations of millions of children. Their solution? Ask for more money.

Nobody should suggest that California’s public schools don’t require investment and upgrades. But before borrowing more money on the shoulders of taxpayers, why aren’t alternatives considered? Why aren’t educators clamoring for reforms that would cut back on the ratio of administrators to teachers? Why aren’t they admitting that project labor agreements raise the cost to taxpayers for all capital investments and upgrades, and doing something about it? If their primary motivation is the interests of students, why aren’t they supporting the Vergara ruling that, if enforced, will improve the quality of teachers in the classroom at no additional cost? Why aren’t they embracing charter schools, institutions whose survival is tied to their ability to produce superior educational outcomes for far less money? Why don’t they question more of these “upgrade” projects? Is it absolutely necessary to carpet every field in artificial turf, a solution that is not only expensive but causes far more injuries to student athletes? Is it necessary to spend tens of millions per school on solar power systems? Does every high school really need a new theater, or science lab? Or do they just need fewer administrators, and better teachers?

And to acknowledge the biggest, sickest elephant in the room – that massive, teetering colossus called CalSTRS, should teachers, who only spend 180 days per year actually teaching, really be entitled to pensions that equal 75% of their final salary after only 30 years, in exchange for salary withholding that barely exceeds what private employees pay into Social Security? Thanks to unreformed pensions, how many billions in school maintenance money ended up getting invested by CalSTRS in Mumbai, Shanghai, Jakarta, or other business-friendly regions?

How much money would be saved if all these tough reforms were enacted? More importantly, how much would we improve the ability of our public schools to educate the next generation of Californians? Would we still have to borrow another $12.3 billion?

Here’s an excerpt from an online post promoting one of California’s local school bond measures: “It will help student academic performance, along with ensuring our property values. If you believe that strong schools and strong communities go hand in hand, please vote…”

Unfortunately, such promises are meaningless and unenforceable. The debt is forever.

*   *   *

Ed Ring is the executive director of the California Policy Center.