What the Measure Would Do

Proposition 2 would authorize the state to sell $10 billion in general obligation bonds to support new construction and renovation of K-12 public school and community college facilities.

The measure would allocate $8.5 billion for K-12 schools, distributed across four types of projects:

• $4 billion for renovation and modernization of existing buildings, including seismic mitigation projects, with $400 million set aside for small school districts and $115 million set aside for testing and remediation of lead in water pipes; funding to be awarded on a first-come, first-served basis
• $3.3 billion for new construction, with $330 million set aside for small districts; funding to be awarded on a first-come, first-served basis
• $600 million for career technical education facilities; funding to be awarded through a competitive process
• $600 million for charter schools; funding to be awarded through a competitive process

The remaining $1.5 billion would be allocated to community colleges for any mix of new buildings, renovations, land purchases, and equipment. Funding would be authorized through the annual budgeting process by the legislature and the governor.

For public school districts, the state usually pays about 50% to 60% of the cost of projects, and local districts are expected to fund the rest with local sources. Only school districts that have a local bonding capacity below $5 million are eligible for additional funding from the state. But under-resourced districts that are above this threshold nonetheless struggle to finance major renovations. Prop. 2 would increase the bonding capacity threshold to $15 million, allowing a greater number of under-resourced school districts to qualify for additional state funding. In addition, Prop. 2 would introduce a sliding scale for the state’s share of costs in some school districts (50% to 55% for new construction projects and 60% to 65% for renovation projects).

Prop. 2 would require local districts to hold public hearings and conduct independent performance audits for the expenditure of funds.

The Backstory

Students whose schools are modernized, clean, and safe tend to have higher test scores, lower suspension rates, and higher rates of attendance. School facilities require regular reinvestment to remain in good condition. Currently, 38% of California public school students attend schools that do not meet minimum facility standards.¹ A report from the University of California, Berkeley estimates that 40% of the state’s classrooms are at least 50 years old.²

California’s budget does not have a dedicated stream of funding to renovate aging public school and community college facilities. Instead, schools rely on voter-approved state or local bonds to finance these repairs. A successful state bond measure in 2016 authorized a $9 billion bond to fund improvement and construction of school facilities for K-12 schools and community colleges. In 2020, 53% of voters rejected Proposition 13, a $15 billion school facilities bond for preschools, K-12 schools, community colleges, and universities. With no new bonds approved since 2016, the School Facility Program (SFP) currently faces a staggering backlog of projects that it cannot fund, with school districts across California submitting requests for new construction and modernization projects totaling $3.3 billion.

Prop. 2 was introduced as Assembly Bill 247, with supermajority support of the state legislature and support from the governor. Prop. 2 requires a simple majority (50% plus one vote) to pass.

Equity Impacts

The current system for distributing SFP funds disproportionately benefits affluent suburban districts that have students who are higher-income, primarily English-speaking, and white.³ Districts with the highest assessed property value (around $2.3 million per student) receive more than double the amount of SFP funding for renovation projects than districts with the lowest assessed property value (around $798,000 per student).⁴ Smaller districts, rural districts, and districts with a higher share of high-need and low-income students are less likely to receive funding from the SFP. Statewide, the average white student receives over $800 more in total SFP project spending than the average Latinx student and nearly $700 more than the average Black student.

Bay Area public school districts have been notable exceptions to this trend. For example, the San Francisco Unified School District and Sunnyvale Unified School District have high bonding capacity because of high assessed property values, ranking them among the districts with the highest property wealth in the state. In the Oakland Unified School District, 76% of students come from low-income families, but the district has a high bonding capacity due to its large industrial tax base. High bonding capacity has allowed these districts to access larger shares of SFP funding than other urban school districts with racially diverse student bodies and many low-income families.

Prop. 2 includes provisions that would slightly reduce economic disparities between districts by making it easier for under-resourced districts to receive a higher share of state funding. However, the funding formula still favors high-resource districts and would not significantly change the distribution of SFP funding across the state.

Pros

• This measure would help public schools and community colleges across the state address urgent and critical infrastructure needs to ensure that school facilities meet basic health and safety standards, including seismic upgrades and water quality improvements.
• With research pointing to a link between student achievement and the conditions of school buildings, the funding provided by this measure could improve academic performance by repairing the environments where students learn.
• Under state law, funding to repair school facilities in California must come from state or local bonds. The state’s school repair fund was last replenished in 2016 and is currently severely depleted after voters rejected Prop. 13 in 2020. The backlog of project requests from school districts totals $3.3 billion.
• This measure includes a sliding scale for required match funding, renovation, and construction funding set-asides and expanded access to hardship funding, all of which would help small school districts and districts that struggle to raise local bond money and keep their facilities up-to-date.

Cons

• Prop. 2 would largely maintain a funding allocation system that favors school districts with high bonding capacity and has a disparate negative impact on Black students, Latinx students, low-income students, and students in rural communities. The proposed programmatic changes are likely still inadequate to address racial and wealth-based disparities in school facilities funding.