B.1.1 Overview of School Facility Financing
For the 2017–18 school year California had 1,026 Kindergarten through 12th grade (K–12) school districts with 6.2 million enrolled students.138 Providing facilities for California’s student population is an ongoing effort of school districts and communities statewide.
In California, school operations, not including the construction and modernization of facilities, are funded primarily by the State, with smaller shares coming from local sources (primarily local property tax revenue) and the federal government.139 Proceeds from the state lottery account for approximately 1% of public education’s overall revenue.140
School construction and modernization programs generally rely on funding provided by debt issued by the State and allocated through the School Facility Program or issued by the local school district. From November 2002 through 2017, voters authorized $99 billion in local general obligation (GO) bonds4 and $35.7 billion in state level school facility GO bonds141 for K–12 school facilities. In the 2016 general election alone, voters authorized $23.5 billion of local school facility GO initiatives142 and $7 billion in state level education authorization that will fund K–12 facilities.143 The financing of school facilities represents a major proportion of public debt issuance in California by purpose, with K–12 school facilities representing over 20% of the debt issued by California’s public agencies in 2017, for a total of approximately $18.5 billion ($13.8 billion in new money and $4.6 billion in refundings).144 Of the $86 billion issued by all California public agencies in 2017, K–12 local school districts represent the largest local issuer type by volume with $12.8 billion issued.145
California’s system of school facility finance has evolved slowly, with periodic changes in state policy resulting from extraordinary events. This section describes the history of school facility finance in California and documents the various programs that have been used to finance K–12 facilities.