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Honig Calls for Drastic Change in Methods of Financing New Schools

November 20, 1987|ELAINE WOO | Times Education Writer

California must build 10 classrooms a day every day for the next six years in order to accommodate burgeoning kindergarten-through-12th-grade enrollment, but it lacks the extra $6 billion to $10 billion needed for the new construction, state schools chief Bill Honig said Thursday.

Addressing a state Assembly committee hearing in Los Angeles, Honig and representatives of local school districts and the building industry testified that the need will be met only through drastic changes in the way school construction is financed.

"We are facing an overwhelming crisis," Honig said. "We are expecting 850,000 new students over the next six years. Our problem is that the funds, even under the most optimistic projections, will be short by billions of dollars. Something needs to be done."

The superintendent said he supports a measure by Assemblyman Jack O'Connell (D-Carpinteria), who chaired the hearing, that would ask voters to allow districts to pass local bond elections by a simple majority instead of a two-thirds vote.

This year, Honig said, 19 out of 30 districts that held local bond elections were able to attain the two-thirds vote required for passage. If only a simple majority vote had been required, nearly all the measures would have passed. "Two hundred million dollars in bonds passed," he said, "but another $200 million did not, and that is part of the problem."

O'Connell's measure proposes a constitutional amendment that would have to be approved by voters statewide in order to change the bond measure requirement to a simple majority.

Developer Fees

It also proposes repealing the developer fees that were created last year to help districts raise money for school construction. O'Connell said the fees have been difficult to collect and have not produced as much revenue as state officials had hoped they would.

A five-year school financing plan approved by the Legislature and Gov. George Deukmejian last year gave local districts the authority to levy a fee of $1.50 a square foot on residential development and 25 cents a square foot on commercial projects. Districts were required to impose the fees in order to qualify for additional state construction money.

But critics said the fees were unfair because they affected mainly new home buyers--primarily young couples with children--while not asking buyers of existing housing to shoulder part of the burden.

According to Richard Wirth, a building industry lobbyist, the fees add $2,100 to the developer's cost of building an average size house of 1,400 square feet, which in turn leads to a higher asking price and eventually to higher property taxes.

The fees "jeopardize (the supply of) affordable housing," he said. "The responsibility for financing new schools should come from all the people of California, not just new homeowners."

Honig suggested that lawmakers find a way to lower, rather than eliminate, the developer fees and link the lowering of the fees to passage of local bonds on a majority vote. He said school districts could not afford to give up the fees entirely.

Republican lawmakers have opposed efforts to eliminate the fees and change the two-thirds vote requirement, however, arguing that such actions would violate the spirit of Proposition 13, approved by voters in 1978, which made local revenue-raising more difficult and shifted the major responsibility for school construction financing to the state.

But O'Connell said that such changes are necessary because last year's school financing package--which would raise $5 billion over five years--will not be sufficient to cover the anticipated demand for classrooms.

The $5-billion package was based on a projection of 100,000 new students statewide each year, but that turned out to be short by 50,000 students, O'Connell said. In addition, it included tideland oil revenues that the governor diverted to other uses, and the developer fees that have produced less money than expected.

"I call this the triple squeeze," O'Connell said. "We need a more equitable approach."

According to Honig, the demand for classroom space will be felt throughout the state, particularly in Riverside and San Bernardino counties, which are anticipating 60% to 70% growth in enrollment over the next 10 years. San Joaquin, Sacramento, Kern, San Diego, Fresno and Los Angeles counties also are expecting significant enrollment increases, he said.

In the Los Angeles Unified School District alone, district officials estimate a need for $2.7 billion for school construction over the next five years. Eighty thousand additional students are expected to enroll by 1992.

According to Byron Kimball, who oversees the district's school construction plans, the district raised $35 million this year through developer fees. A substantial portion of those funds have been earmarked for purchasing the portable classrooms the district needs to accommodate its surging enrollment. Kimball said the district would support elimination of the fees only if it could be assured that other funding sources would be available to cover those costs.

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