Posted on 09/07/2006 10:28:02 AM PDT by NormsRevenge
If California voters reject the $10.4 billion education bond on the November ballot, the state's builders and developers will be on the hook for the full cost of every new school built in the state, starting at the end of 2007. The specter of having to cough up thousands of additional dollars in fees per home has California's builders and developers dumping millions of dollars into the education bond campaign.
Two separate committees, funded largely by builders, developers, architects and engineers, already have contributed more than $1 million to help pass Proposition 1D, the school-bond measure.
The powerful California Building Industry Association (CBIA) has contributed another $1 million to the umbrella campaign for the five-piece infrastructure-bond package, which includes the education bond.
"If the state runs out of funds and there is no money in the bank, then the builders are responsible for 100 percent of new construction," said Tim Coyle, senior vice president for governmental affairs for the CBIA. "If all the costs fall on the new homebuilder, chances are they will be passed on to the new homebuyer."
In California, the financing of new public schools relies on three revenue sources: state bond money, local bond money and developer fees as three supports.
Whenever there is available state bond money, the funding for new construction is split evenly between the state and local governments, with developers chipping in to fund a portion of the local-government half of the equation.
But if there is no local bond money available, then developer fees cover all of local government's half of construction costs.
And if there is neither state funds nor local funds, then developers must pay for the full cost of new school construction. It is this last scenario--where development fees could literally double overnight--that builders fear most. It is also what would happen if the education bond were to fail in November, according to both government and industry estimates.
So, it's always in developer's interests to have money in the bank. But that bank account is dwindling.
"The state will run out of bond money to allocate for new construction by the middle of the 2007-08 fiscal year," say Department of Finance spokesman H.D. Palmer. At the same time, says Palmer, the administration is projecting that 50,000 new students over next five years and another 250,000 in 10 years.
That shrinking bond treasury--combined with a softening housing market--has made developer fears even more acute.
"If the market is good … if there is healthy demand, then [new] costs can be passed on to the homebuyer," says Coyle. "However, when the market is softer--as it is today--those costs are absorbed by the builder."
Adding to the development community's unease is weaker-than-expected polling, most notably a recent poll by the Public Policy Institute of California, which showed the education bond receiving the lukewarm support of 51 percent of likely voters.
Buoyed by their financial self-interest, the building and development community has provided major financial backing for education bonds dating back to 1998, when then-Speaker Antonio Villaraigosa cut a controversial deal to establish the current three-pronged system of school construction funding. In the decade before that deal, developers had played a much more substantial--and financially volatile--role in funding new school construction.
Some in the education community decried the 1998 deal as a developer-giveaway, shielding developers from having to shoulder the bulk of construction costs. The California School Boards Association (CSBA) voted to oppose the measure. At the time, then-CSBA President John D'Amelio said, "As far as compromises go, this one is tantamount to saving the farmhouse for another few years by trading off the rest of the farm." Even the state Parent Teachers Association voted to stay neutral on the 1998 bond.
But by tying building fees to voter-approved bonds, the deal ensured that two of Sacramento's most powerful interest groups--the education and building lobby--would come down on same side of the school-bond issue for years to come.
In this year's education-bond campaign, the California Teachers Association is the biggest supporter, with $5 million in contributions to the campaign so far. But the developer coalitions are the second biggest backers.
Ever since the 1998 deal, builders have poured millions into school bond campaigns. In 2002, the CBIA poured $1.05 million to help pass a multi-billion-dollar school bond and followed that up with another $1.135 million to pass another bond in 2004.
The developer- and architect-backed Coalition for Adequate School Housing, which contributed $750,000 to the 2006 education bond last week, gave $785,000 in 2004 and $525,000 in 2002 to other education bonds. The Community College Facility Coalition, which indirectly gave $300,000 this week, contributed another $426,000 in 2004 and $401,000 in 2002 to education bonds.
Those two committees are funded by a slew of developing interests, both big and small. Donors range from Orbach, Huff and Suarez, a California-based law firm specializing in construction law, to Gonzalez Architects, a Georgia-based architecture firm.
This year's education bond included another small perk for developers, tucked deep in the 25-page legislation. In 1998, the education deal suspended the power of local government to reject new developments on the grounds of a lack of adequate school facilities. That provision was set to last eight years, but was quietly renewed earlier in the legislation placing the education bond on the November ballot.
Building industry spokesman Tim Coyle called the renewal a purely "mechanical piece" that prevents "local government from trying to extort more money from a homebuilder for new schools."
And even the League of Cities, which vehemently lobbied against the provision eight years ago, endorsed this year's education bond. "The need for funding for school infrastructure was dominant in our decision to support the bill," said League spokeswoman Megan Taylor, despite local government misgivings about the lack of ability to reject new developments.
Robin Swanson, spokeswoman for the Yes on 1D campaign, says developers and builders are supporting the bond not just because it is good for them but for the entire community.
"It is good for developers to have quality schools near their new homes. It is good for property values," said Swanson. "It is good for the homebuyers. It is good for the community."
Building more schools for the children Americans don't have
(but flow over the borders daily)
It more and more reads like California is dominated by slush funds for various business interests.
Stop aborting them. And stop blaming Mexico for all our problems.
Stating the obvious is not "blaming" anyone.
And who said anything about Mexico?
lol.. Immigration thread police Alert!
Thanks, I'll make sure and discipline CCG or do you want the honors?
Sometimes true, more often false.
And who said anything about Mexico? --->(but flow over the borders daily)
You're right, the terrorists came through Cananda.
the terrorists came through Cananda.
Hey, you're right, one was caught coming thru Customs at Vancouver not so many years ago.
You think the Gub will veto SB 160?
SB 160 (Cedillo) Requests the University of California and requires the California State University and the California Community Colleges (CCCs) make it easier for students who are currently exempt from paying nonresident tuition at a California College to participate in all student aid programs including illegal immigrants.
I hope so. He has a habit of vetoing Gil, thankfully.
Developers don't pay for schools. Buyers pay for schools. In this case, the protected class is the local home buyer.
The relief being sought is to shield new buyers, with children, from the direct expense of building public schools for their children. These buyers are expecting that other taxpayers, from across the state, will ameliorate the direct, financial consequences of their personal decisions.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.