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.

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

California Teachers Union on Trial

A trial began last week in Los Angeles challenging the state laws granting teacher tenure after 18 months, “last-in, first-out” layoff laws, and the elaborate dismissal procedures which make it virtually impossible for teachers to be laid off. Together, these teacher protections result in far too many grossly ineffective teachers who cannot be fired. The lawsuit, Vergara v. California, is seeking to have the court overturn these laws based on the fact that children who end up with bad teachers are being effectively denied their right to an education.

In a broader sense, however, what is actually on trial is the vision for education that has been foisted upon California by the teachers’ union, most specifically the California Teachers Association. The California Teachers Association is the most powerful special interest in California. With 325,000 members and well over $300 million in total annual dues revenue, the CTA exercises overwhelming political influence at the state and local level.

Throughout California, if you want to successfully run for the state assembly or state senate, or just want to win a seat on the local school board, you have to consider who the CTA is going to support. If they like you, you will probably win. If they don’t, expect a tough fight against long odds. Strong majorities in both the California state assembly and senate were elected with teachers union support, as well as the vast majority of school board members throughout the state.

And once they get you elected, you are expected to go along with their program, which includes supporting all of the statutes being challenged in Vergara.

If the more than six million students currently enrolled in California’s public schools were getting good educations, it wouldn’t matter so much who controlled California’s education agenda. But the data suggests otherwise. Only 34% of 4th graders and 25% of 8th graders test proficient in math, and only 25% of 4th graders and 24% of 8th graders test proficient in reading. Only 23% of California’s high school students test ready for college reading, and only 58% test ready for college math.

Despite schools that are failing, the CTA aggressively supports laws that make it virtually impossible to fire even the most grossly ineffective teachers. For example, a study by LA Weekly found that from 2000-2010, the Los Angeles Unified School District, a district with 33,000 teachers, attempted to fire only 7 teachers and spent over $3.5 million dollars attempting to do so. Eventually, only 4 teachers were dismissed.

In their zeal to protect every single one of their dues paying teachers, the CTA seems to have forgotten what every parent knows – teachers matter. Teachers have a profound impact on their students. A good teacher can make a tremendous difference in a student’s life. Eric Hanushek, a leading education economist, notes that “teachers near the top of the quality distribution can get an entire year’s worth of additional learning out of their students” and that suggests that we could dramatically improve test scores if by eliminating the the bottom 5 to 10 percent of teachers and replace them with average teachers.

But the California Teachers Association steadfastly fights any reforms that would allow any teachers to be fired, or even evaluated. Last year, the CTA defeated bills that would have made it easier to remove child abusers from the classroom, and another that would have required more frequent teacher evaluations.

The Vergara case, if successful, will change, overnight, the rules protecting bad teachers which the CTA has imposed on our schools.

We can only hope.

Mark Bucher is the President of the California Public Policy Center