News from: CalChamber

The California Chamber of Commerce Board of Directors has taken a support position on Proposition 2, a November ballot measure that authorizes a $10 billion general obligation bond to support construction and rehabilitation of instructional and support facilities for public schools and community colleges.

Urgent Need for Repair

The CalChamber endorses Prop 2 due to the urgent need to repair and modernize California’s schools. According to the California Department of Education (CDE), around 30% of the state’s K-12 classrooms are more than 50 years old, with 10% being at least 70 years old. Schools require updates not only to address health and safety issues and normal wear and tear, but also to meet modern educational standards and environmental efficiency.

Researchers from the Public Policy Institute of California estimate that the state’s public schools face more than $100 billion in needs for new construction and modernization. Since 2018, funds for new K-12 construction have been exhausted, and modernization funds were fully allocated as of February 2019. As of June 26, 2024, the Office of Public School Construction has received $1.186 billion in applications for new construction and $2.282 billion for modernization, exceeding the funds available from previously approved school bonds.

K-12 allocations for new construction funds have been depleted since 2018 while modernization funds were fully allocated in February 2019. According to the Office of Public School Construction, $1.186 billion in new construction applications and $2.282 billion in modernization applications have been submitted beyond availability from already-approved school bonds.

The 2022-23 Five-Year Capital Outlay Plan for the California Community Colleges, approved by the Board of Governors in 2021, projects $23.2 billion in facility needs from 2023-24 to 2026-27.

Consequences on Housing Costs

Without new state funding, builders who pay fees to offset school impacts could see those fees double or triple, as school districts will demand full mitigation. Depending on the location, school impact fees could rise by $17,000 to $21,000 per unit, increasing costs and discouraging future development throughout California.

Without a fully funded School Facilities Program, the home building industry risks losing one of its key protections under the California Environmental Quality Act (CEQA). Before the 1998 law, local school districts would use CEQA lawsuits to delay projects and pressure home builders into covering the entire cost of new schools. This costly and contentious situation was addressed by a law that established a consistent, pre-emptive system, clearly outlining the roles and cost-sharing responsibilities of builders, school districts, and the state. Additionally, the law ensures that school districts identify their specific facility needs and retain the sole authority to determine the financial mitigation requirements for new residential developments within their boundaries, provided the state contributes its share of funding.