Proposition 13: California’s $15 Billion School Construction Bond

Tuesday March 3rd, 2020

What is the 2020 Proposition 13?

On March 3rd, 2020 you will vote on a $15 billion school construction bond with a familiar, but confusing name. It’s called Proposition 13. But, no, it’s not connected to the property tax measure, Proposition 13, from the 1970s. The number 13 has simply cycled through and was selected randomly leading to confusion among many voters. Louie Lujan.

Instead of protecting California taxpayers, however, this Prop 13 is a costly $15 billion school bond that threatens to significantly increase local property taxes — and embodies the opposite idea from the original Prop. 13. Specifically, it earmarks $9 billion for preschools and K-12 building modernization and $6 billion for public universities and community colleges. Louie Lujan.

The state currently has a $5.6 billion budget surplus that could easily be used for school repairs rather than going further into debt. Additionally, the bond is going to be an extremely costly debt service. The $15 billion worth of school bonds could double in terms of cost when you add in the interest costs. The nonpartisan Legislative Analyst’s Office estimates it will cost $26 billion over 35 years, including $11 billion in interest. That equates to a debt payment of $740 million each year. Another costly bond will raise property taxes at a times when voters have seen recent tax increases as a result of similar bonds for school facilities. Between 1998 and 2019, voters approved five such measures: Proposition 1A (1998), Proposition 47 (2002), Proposition 55 (2004), Proposition 1D (2006) and Proposition 51 (2016). Louie Lujan.

Will my Property Taxes go up?

Yes. It is very likely that Proposition 13 will lead to increased property taxes at some point in the future. If Prop 13 passes, the state will transfer money from the general fund to separate “Prop 13 Fund” to pay for school projects. Schools can then apply for money. For example, in order to receive bond money, local districts will need to provide matching funds through their own local bond proposals. This will lead to many new local bond proposals that voters will face from their school districts. Proposition 13 will create pressure for new taxes because local school districts will have to raise money to match state funds. Current state law limits how much school and community college districts may issue in local bonds, based on the total assessed value of property in the district. The current ceiling of 1.25 percent of assessed value for elementary and high school districts would rise to 2 percent if Prop. 13 passes. Louie Lujan.