Fresh Off The Ballot

This November we are seeing an unprecedented amount of bonds in Santa Clara County.  There are 12 bonds proposed in the county totaling over $3.9 billion dollars. Adding up all the bonds in our county proposed over the last 10 years leading up to November, passed or failed,  total $11,094,252,058.  Over 26% of the 10 years total proposed amount of bonds is going to appear just on this one ballot.  For the record, only two of those previous bonds have failed, putting tax payers on the hook for over $10 billion already. Why the sudden run on the bank of taxpayers?

There is no doubt that education is a worthy investment. Better schools inspire educational pride, encourage quality teachers, and ensure safety.  Every school bond in Santa Clara County, for the last 10 years, have stated these exact three reasons why you should vote yes. They plead the need to address maintenance and upgrades to roofs, plumbing, and pavement.  Every bond warn of state cuts that cannot touch the bond and boasts how they will have an oversight committee to assure accountability.

The $15 billion dollars in bonds discussed is just principle.  Many of these bonds are issued at a 2:1 debt to principal rate meaning that $15 billion borrowed will cost taxpayers $45 billion to pay off. Many of these bonds are on terms ranging from 25 to 40 years in length.  The average school student will be paying off these loans by the time they themselves are parents. This is the debt accrued above and beyond the annual budget of these schools or additional state funding. Most banks would not issue you a second mortgage to fix roofs, plumbing, or pavement if you could not afford the basic maintenance of the house.  These are the types of improvements that school boards should be responsible for accounting for on a yearly basis and not in last ditch loans. Should there be a gap the state has a multitude of grants to assist.

  • Proposition 98 was passed in 1988 and set a minimum for annual funding levels for K-12 schools and community colleges.
  • Proposition 2, passed in 2004, affirmed that state surplus money to be designated towards capital improvements of our schools. The state predicts it will receive over $2.4 billion in school reserve funds by 2019
  • Proposition 30 was passed in 2012 to increase state sales taxes and prevent school budget cuts.
  • Proposition 55 was passed just in 2016, extending prop 30 for an additional 12 years. Safeguarding schools from budget cuts regardless of potential state shortcomings.
  • The local control funding formula (LCFF), enacted in 2013–14, establishes separate funding streams for oversight activities and instructional programs.
  • In January, Governor Brown announced his LCFF was $3 billion and 2 years ahead of schedule
  • California’s current per-student spending of $11,149 with additional money, called concentration and supplemental grants, tied to the numbers of low-income students, English learners and foster and migrant children they enroll.
  • Revisions to Assembly Bill 2808 are currently being reviewed to increase per-student spending by over $6,000.

Today the state has a surplus of funds ready to be spent on local projects - just like these bonds propose - but did anyone asked the state before coming back to the taxpayers? Many School Board members, elected and candidates, are not even aware of the School Improvement Grants (SIG) available within the state. One school board incumbent, in a low income district, I spoke with recently stated “We don’t bother asking [the state] because we expect the answer to be no.” Meanwhile, some school districts down in Southern California have hired staff just to work on researching and writing grants.  For a long time school boards have gone unchallenged. Many of their ballot measures and incumbents running without opposition. Some school board members, in Santa Clara County, are campaigning for their 8th term this November. That’s 28 years of no change or challenge towards how a school board operates with the possibility of 4 more years.

There have been no restrictions on how the dollars were spent, aside from a generic rule that the extra money for kids facing particular challenges should be spent on them. There is little transparency and even less accountability. Going through previous school bond measures show the shell game of promising capital improvements only to move the money towards the types of projects that look good for re-election - football fields, drama classrooms, other projects that should have come secondary to the promises made in the bond’s 75-word ballot statement.

So what happened to the oversight committees these bonds all promised?  The state requires the oversight committee; and these committees are required to produce annual reports.  Yet few reports are completed or posted publicly. Most of those that are posted are hard to find. Discussion regarding the spending often happens in board meetings addressing empty rooms. School Boards going unchallenged by either public or parent creates an ideal environment for cultivating apathy and bad ethics.  

News, from almost every county in California, report one misdoing after another by School Boards.  In just our own county both Franklin McKinley’s board member embezzlement and Alum Rock’s fraud and restraining orders fill our news headlines. Montebello, San Ysidro, Soledad, Palmdale; District by district violations occur and go unchecked; eroding the ethical standard of these elected representatives, as they become bolder and bolder in their attempts to steal from children and taxpayers. Only for these board members to use their title to go on to city and county elected positions.

Even the most ethical of members sign off on the fuzzy math associated with bonds.  Bond measures spend their words threatening state budget cuts rather than providing the specific interest rate being charged, or the length of bond life or the costs claimed by bond underwriting activities. If a private individual were to apply for a 20-year home mortgage or a five-year car loan, by law, the interest rate and payback schedule must be clearly spelled out before signing. So why is this not done when it’s “for the children”.

Just this year AB-195 took effect to help address the problem with how local ballot statements are written.  The bill would require the statement describing the measure to be a true and impartial synopsis of the proposed measure.  This bill was a step in the right direction by requiring bond measures to be specifically worded as “Shall the measure (stating the nature thereof) be adopted?”. Starting with “Shall the measure...” and ending with “ adopted” seems minor but psychologically to the average voter can change everything.  Especially when these measure are translated to other languages.

The bill also requires the ballot language for bond measures include the rate and duration of the tax or bond.  Many of these bonds and taxes still obscure the impact by using misleading phrasing; referring to the bond costing in terms of cents per $100 of assessed value; In a county where many house values are some of the highest in the nation.  Stating “8 cents per $100 of assessed value” is not the same as saying “an average of $500 per year”. And “until paid” is hardly the same as stating “for 30-40 years”.

Few, however, are following even the simple adjusted requirement that AB-195 mandate.  In addition, AB-195 assures the costs associated with any adjustments to ballot measures caused these new requirements would be covered by the state to avoid a financial impact on any city, county, or board.  Expecting compliance costs nothing. The Libertarian Party of Santa Clara County submitted complaints against 19 of the 33 measures on November’s ballot for failing to comply with AB-195.  Many of these being school bonds that fail to state the rate and duration.  The Santa Clara County Registrar of Voters, however, has explicitly put aside our request; only after pressing for an update did they state “council has chosen not to respond”. What message are we sending to the school boards, already inundated with fraud and corruption, when we tell them they don’t have to follow the rules or comply with transparency?

Each and every one of these bonds add to the cost of living. Adding hundreds per year to the specialty taxes on our properties; a cost few landlords will absorb out of kindness.  We say these bonds are “for the children” and yet we take away the money that middle class families count on for school clothes or the cost of lunches. The added $200 a year is not much to the homeowner but could mean everything to the struggling families that are being suffocated out of the Bay Area by the rising cost of living.  The added $200 is more than what most teachers pay for the yearly school supplies they provide out of pocket. Another demographic of renters who are rapidly fleeing our county. What good is a school bond if the only students left are the ones from families are well above the $117,400/year low income threshold. Seemingly, understanding the fiscal impact of these bonds will require school supplies too.

I shouldn’t have to ask you to bring a calculator with you on November 6th but yet I am.  Know the numbers and know the candidates before you vote.

Update:  SB 863 is currently being pushed through to delay implementation of AB-195 on the November election.  SB 863 is being supported by our own local Senators Beall and Wieckowski.