SAB holds overcrowded funds unchanged, looks for help on new funding

The State Allocation Board voted Wednesday to leave unchanged the status of a lightly-used fund for alleviating overcrowded school campuses - despite a growing anxiety about the rapidly dwindling pool of overall school construction money.

But board members said they would support a resolution urging the state treasurer to include school construction bonds at a sale planned for sometime this fall.

Meanwhile, California's Coalition for Adequate Housing sent a letter to Gov. Jerry Brown last week urging support for the fall bond sale, which they argued would stimulate the economy by creating construction jobs as well as sales and income tax revenue.

The sequence of events cast a spotlight on the state's growing dilemma over school construction and modernization needs which, along with many other demands on state resources are fast approaching a crisis stage.

A five-year needs assessment made by the Office of Public School Construction in 2009 placed the demand in California then at $11.3 billion - about $7.8 billion in new construction and another $3.5 billion in modernization projects.

But the money to cover the list is almost non-existent.

About $4 billion in bonds remain in the School Facility Program, or 11 percent of the $35.4 billion in statewide school facility bonds that voters have approved over four separate elections beginning in 1998.

For almost a year, the state board has been considering whether to transfer the remaining $287.4 million from its Overcrowding Relief Grant program to other funds designated for school construction -- possibly the Critically Overcrowded School Facilities fund or the New Construction Grant fund. Both those funds -- as well as five others created under 2006's voter-approved, $7.3 billion bond measure Proposition 1D - are nearly depleted because of high demand.

There is some hope that President Barak Obama's latest economic stimulus plan might find support in Congress - it includes $50 billion nationally for school construction.

A campaign, led by C.A.S.H., is also underway to get a $7 billion statewide bond measure on the ballot next year.

Of more immediate attention, however, is the pending fall state bond sale. Kathleen Moore, director of the California Department of Education's School Facilities Planning Division, said a bond sale needs to occur this fall if the funding programs are to continue.

A bond sale is imperative to this program," Moore said, pushing her colleagues to agree to have a resolution brought back to them next month.

But officials in the treasurer's office have said the sale is expected to yield less than $1.6 billion in total proceeds and schools, which have received the lion's share of bond money in the past, are not likely to be included.

Thus, one of the few options that the board has is to move money from the lightly-used overcrowded fund to programs more accessible to schools.

But the panel decided that the money had been originally earmarked by voters for the overcrowding program.

"It was the will of the voters that there be an overcrowding relief program," Moore said. "We said we're committed to this program, and until there's legislative will to change that, we should continue it."