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Prop 51: School Construction Bond

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Sheppard Mullin

Sponsored by Sheppard Mullin, a full service, global law firm with 750 attorneys.  The firm handles corporate and technology matters, high stakes litigation and complex financial transactions.  Visit www.sheppardmullin.com. 

Updated 1:30 pm Nov. 9, 2016

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Prop 51 has passed with a margin of 54% yes to 46% no. The state can now issue $9 billion in bonds for school repairs and construction.

What would Prop 51 do?

Proposition 51 would authorize the state to issue $9 billion in bonds for building and fixing schools. Here’s the breakdown:

  • Building new K-12 schools - $3 billion.
  • Modernizing existing K-12 schools - $3 billion
  • Community college renovations and equipment - $2 billion
  • Facilities for charter schools, career and technical education – $1 billion

What is the full cost of $9 billion in bonds?

Bonds are sold to investors who are paid back with the interest from the government.

  • Bonds = $9 billion
  • Interest =   $8.6 billion.
  • Total = $17.6 billion.

It would take 35 years to pay them off at a cost of $500 million a year.
What are the arguments in favor of Prop 51?

Supporters say:

  • Many of our schools need new facilities, better classrooms and repairs. Repairs include retrofitting for earthquake and fire safety, and removing asbestos and lead paint.
  • Expanding our community colleges means more opportunities for more students and veterans.
  • Prop 51 will upgrade technology in our classrooms, libraries and science labs.
  • Prop 51 would create a construction jobs.
  • It contains taxpayer protections and accountability measures.
  • All the money must be spent locally on projects approved by local schools and community college boards.

What are the arguments against Prop 51?

Opponents say:

  • Prop 51 was written and sponsored by the construction industry so it could benefit from $9 billion dollars’ worth of taxpayer supported business.
  • Previous school bonds had the backing of the Governor and the legislature. This one does not because it is not necessary.
  • Governor Brown called the measure a “blunderbuss” – meaning it lacks precision. He said “the money would be far better spent in low-income communities.”
  • The money will not be distributed equitably. That’s because rich schools employ experts who know how to get the lion’s share of the bond money. Poor schools will lose out.
  • Prop 51 will put California further into debt. We already spend $2 billion a year to pay off previous school bonds.
  • These school bonds would be state issued and state controlled. Local school bonds are better. They keep control local and they are almost always approved. So this statewide bond is not necessary.
  • Over the next decade school enrollment is expected to decline. We should not be building new schools.

Who supports Prop 51?

The main supporter of Prop 51 is the California Building Industry Association, and a committee that advocates for schools construction. Together they’ve put in about $3.5 million to get Prop 51 passed.

Other supporters include the California Democratic and Republican parties, retired teachers, school boards, the California State PTA, community colleges and the League of Women Voters of California.

Who opposes Prop 51?

The main opponent is Governor Jerry Brown.  In fact, two years ago he threatened to veto this proposal. So it didn’t go anywhere. So supporters bypassed the Governor and got the signatures needed to put the bond measure on ballot.

Other opponents include the California Taxpayers Action Network and Educators Opposed to Sprawl and Developer Abuse.

Show me the money

What does my vote mean?

A “yes” vote means you’re in favor of the state issuing $9 billion in bonds for school repairs and construction.

A “no” vote means you do not want the state to issue the bonds.

Click here for a cheat sheet on all the California ballot propositions.

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