Calif. Voters OK Governor’s Crisis Package

By Joetta L. Sack — March 10, 2004 3 min read

California residents approved a $12.3 billion bond for school construction by the slightest of margins last week, showing signs of wariness toward more debt in the financially shell-shocked state.

But voters gave Gov. Arnold Schwarzenegger a sign of their confidence in his leadership by passing his plan to issue bonds to spread out California’s remaining $15 billion deficit to balance the state budget.

Education groups were happy, and relieved, at the passage of both bonds in the March 2 election, and many were hopeful that the plans would help ease the severe budget shortfalls and growing need for school facilities across the state.

“There are just enormous facility needs, and we are very dependent on state financing for those projects,” said David Pollock, the president of the California School Boards Association.

Results on Proposition 55, the bond that allots $10 billion for K-12 school construction and $2.3 billion for higher education construction, were so close that the final unofficial results were not available until the morning following the voting.

In the end, 50.6 percent of voters approved the bond, and 49.4 percent voted against it.

Contrasts in Support

The bond was the second part of a larger initiative to build and renovate schools across the state, where many districts are seeing rapid growth. The bond’s companion piece, a $13.05 billion bond, passed in November 2002 with a much larger show of approval, 60 percent.

The school bond outcome contrasts with the sizable support given to Proposition 57, Gov. Schwarzenegger’s $15 billion “Economic Recovery” bond. More than 63 percent of voters approved that measure, and another 71 percent approved a companion balanced-budget measure, Proposition 58, that will largely prohibit future borrowing to patch holes in the state budget.

Mr. Schwarzenegger’s $76 billion fiscal 2005 budget plan, which was released in January, depended on the passage of the Proposition 57 bond, which in essence mortgages the estimated $14 billion deficit. The Republican governor, who took office in November after the recall of Gov. Gray Davis, had campaigned throughout the state for the measure’s passage. He also supported Proposition 55.

As the result of a deal negotiated with education groups over the governor’s fiscal-recovery plan, his budget would defer $2 billion from the upcoming state education budget to fiscal 2006 and suspend for one year the state’s constitutional guarantee on minimum per-pupil funding.

The budget must still be approved by a two-thirds vote in the Democratic-controlled legislature.

Meanwhile, the state’s top education official was optimistic that schools could withstand the budget pressure and would see better times.

“Given the magnitude of the state budget situation, it will be difficult for the next year or two, but we are hopeful the economy will improve,” said State Superintendent of Public Instruction Jack O’Connell. “It’s a constant battle, but we will survive and persevere.”

‘Sticker Shock’

Voters were presented with Proposition 55 at the same time 61 districts, including Los Angeles Unified, San Bernardino Unified, and several districts in Orange County, were campaigning for local school construction bonds. California requires its districts to provide matching funds to receive state bond money.

Of the 61 local bond initiatives, 49 passed, according to the California Department of Education. Los Angeles was among the districts that won approval.

California voters have traditionally shown strong support for state ballot initiatives related to school spending, but the narrow passage of Proposition 55 was likely due to a heightened concern about the state’s economy and the burden of increased debt, supporters of the measure said.

“I think there was a little bit of sticker shock on the part of the voters,” Mr. Pollock said.

Furthermore, some districts with declining enrollments have recently closed schools, particularly in the San Francisco Bay area, he added, and those closings likely left some local voters questioning the need for new schools.

As for the governor’s plan for financing the deficit, State Treasurer Phil Angelides has warned that the state’s bond rating has already been lowered several times because of the amount of debt California has assumed.

He had urged Gov. Schwarzenegger to draw up a better plan. He warned that the state could see “fiscal chaos” if Proposition 57 went down to defeat, because there was no back-up plan other than more significant cuts to programs.

Mr. Angelides is seen as a likely Democratic candidate against Mr. Schwarzenegger in the 2006 gubernatorial election.

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