Our
View: Prop. 55 too risky right now
California
voters entering the polls on March 2 may
be surprised, in this time of financial
woe, to find an initiative seeking $12.3
billion worth of bonds to finance school
construction and renovation. They should
be.
Proposition
55 would provide funds for building and
repairs at elementary and high schools and
universities. K-12 schools would receive
about $10 billion, while community colleges
would get slightly less than $1 billion.
The California State University and University
of California systems would each receive
$690 million.
Supporters
argue that the measure is compatible with
the state's dire financial status since
accompanying construction projects would
potentially generate hundreds of thousands
of jobs, thus creating more income and sales
tax revenue to help repay the bonds. This
prediction is not wholly incorrect, but
it ignores other realities.
First,
there is a more important bond issue on
the ballot. Proposition 57 is a $15 billion
proposal that would add $4 billion to an
already approved package seeking to allay
the state's deficit. The proposition would
forestall massive cuts in social programs
as well as huge tax increases. Taking on
this burden assumes California will regain
its financial footing during the next decade
and be able to pay its debts.
Second,
approximately 1 million Californians are
unemployed. The percentage of them that
would be either willing or able to take
a job as a construction worker is unknown.
Of the jobs that are created, a substantial
portion can be assumed to be filled by people
who leave a different job to take the position,
which therefore has little impact on state
revenue.
There
even seems to be a good deal of disagreement
over how many schools will actually benefit
from the plan. In order to receive funds
from the legislation, a school district
must provide 40 percent matching funds.
Because of this, only about half of all
school districts received funds from Proposition
47, a $13 billion bond measure passed in
2002.
What
makes the picture even more disconcerting
is the fact that while schools will be given
$12.3 billion, the initiative is estimated
to have a final cost of $24.7 billion after
the factoring in of interest.
Some
groups claim that no taxpayer funds will
be used to pay back the bonds, a contention
we believe is shaky. State and local bonds
are being sold to finance the measure. State
bonds are repaid using state revenue and
sales taxes, while local bonds are funded
through property taxes. What the groups
should be saying then is that no new taxes
will necessarily be needed, and that the
programs their taxes usually fund could
be scaled back if the state has difficulty
providing compensatory funds.
This
proposal would be in addition to $37 billion
worth of school construction bonds approved
by voters over the past decade and would
be supplemental to a $3.5 billion annual
state budget for school construction and
renovation. Also, K-12 schools still have
about $2 billion from bond revenue in their
construction coffers, enough to keep them
building and repairing classrooms for a
while.
By
redirecting a portion of the state's $101
billion budget -- the measure is ostensibly
worth such a sacrifice -- we could achieve
the goals of the legislation without assuming
a mountain range of debt.
Even
if this path proves untenable, the measure
should be rejected. The bond issue will
appear on the ballot again in November 2004.
Waiting at least until then to let our state
regain its balance would be more amenable
to fiscal security and might lessen the
financial burden with which we saddle our
future generation -- the generation this
measure purportedly aims to enhance.
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