There is universal agreement that our kids’ public schools need upgrading, remodeling and repair. How we pay for this is a much more controversial discussion.
The politicians who control California have the money they need to improve our schools. The primary duty of the governor and the legislative leaders should be to use taxpayer money wisely and set sensible priorities.
Yet they propose borrowing more money rather than using the money they have.
The $15 billion school bond on the March 3 ballot is numbered as “Proposition 13,” but don’t be fooled. This is not anything like the tax-cutting Proposition 13 of 1978 that helped people keep their homes when faced with what seemed like never-ending property tax increases.
This year’s Prop. 13 proposes that California taxpayers borrow $15 billion at a cost of $11 billion over 35 years, obligating us and our kids to repay $26 billion.
And who gets the $11 billion taxpayers will pay in borrowing costs? Lawyers and bond brokers on Wall Street who will be laughing all the way to the bank.
Gov. Gavin Newsom and Democratic legislators have played up that the state has a $22 billion budget surplus this fiscal year.
Remember that for years these same Democratic politicians deferred maintenance on our schools, claiming they didn’t have the money to help schools repair their facilities. Now the state clearly does have the money yet the Democratic administration won’t spend it on schools.
Rather than funding school repairs through high interest Wall Street bond financing, why not instead use some of the state budget surplus for schools?
It makes fiscal sense and would be a much more efficient use of our tax dollars, and doesn’t send our money to Wall Street financiers.
But ideas that make sense to hard-working taxpayers, such as not maxing out high-interest credit cards, don’t seem to appeal to the Sacramento politicians and bureaucrats that run our state.
Newsom, et al., want to borrow as much money as they can and then later come back for higher gas taxes, higher income taxes and higher sales taxes to finance their pet projects, such as the California high-speed rail.
One other tidbit about March’s Prop. 13 — besides being a $15 billion school bond costing $11 billion in interest, the fine print of this ballot measure would allow local school districts to start borrowing up to 60 percent more than they currently can without special permission from the State Board of Education.
In some cases, districts might be tempted to borrow more to receive state Prop. 13 funding. We know all too well that when school districts start going further in debt, they come back to the voters to raise property taxes.
With California in the midst of a housing crisis, doing anything to raise property taxes is downright foolish because it will further increase the overall costs for buying, and holding onto, a home in California.
Most Californians come down on the side of kids every time, yet, unfortunately, the majority-party politicians have their spending priorities confused. Defeating this year’s Prop. 13 will force politicians to get their priorities straight.
It will also end the cozy “you scratch my back, I’ll scratch yours” relationship Newsom and the majority party politicians have with Wall Street’s bond sellers, who care more about their next yacht than the leaky roof at our kids’ schools.
State Sen. Brian W. Jones is chair of the Senate Republican Caucus and was elected to the California State Senate in 2018. He represents the 38th Senate District, which includes much of inland San Diego County and parts of the city of San Diego.
The opinions in this commentary are those of the author. It is one of a series of commentaries EdSource is publishing expressing a range of views on the school bond measure on the March 3 ballot. As a nonpartisan, nonprofit organization EdSource takes no position on the ballot measure. Read other perspectives here.
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Jim R 3 years ago3 years ago
Mr. Jones' argument is off-base. "Wall Street" isn't the problem. The typical California Municipal Bond carries an interest rate of about 2% per annum. The cost of living in Southern California is rising at 3% per annum. Thus, borrowing for schools is a bargain. It is possible to borrow today and pay back with cheaper dollars tomorrow. Effectively, the cost to the borrower is near zero. The actual problem with school borrowing … Read More
Mr. Jones’ argument is off-base. “Wall Street” isn’t the problem.
The typical California Municipal Bond carries an interest rate of about 2% per annum. The cost of living in Southern California is rising at 3% per annum. Thus, borrowing for schools is a bargain. It is possible to borrow today and pay back with cheaper dollars tomorrow. Effectively, the cost to the borrower is near zero.
The actual problem with school borrowing with bonds is who will repay. Typically, the property owner carries this burden, and most already feel burdened. If instead, the borrowing were a general obligation of the borrower, in prudent proportion to general fund income, then people might be more inclined to support higher funding for schools, overall. But, alas, it is not to be, since school boards tend to spend mosts of their general revenue on labor and neglect buildings.
JP 3 years ago3 years ago
There is no one more “cozy” with Wall Street than your Republican friends so I find this article rather interesting. The problem is that corporations don’t pay their fair share of taxes which leaves our budget thin. Guess which party is all in favor of low or no taxes for the rich and corps? That’s right – Republicans.