B.1.1.1 School Facility Finance Before Proposition 13
Early in California history, local tax revenue supported the construction of schools.146 A revision to the California State Constitution in 1879 granted school districts the authority to issue bonds to finance school construction projects, subject to the approval of two-thirds of voters within the district. Local GO bonds were repaid with property tax revenue raised from a special tax assessment on all property within a school district. Districts could issue additional bonds up to their debt capacity level, which was set at 1.25% of assessed value (AV) for elementary and secondary districts and 2.5% for unified districts; districts are still subject to these statutory debt limitations.147 From that time until 1933, proceeds from local school bond elections were the primary source of local revenue for school construction projects.
The 1933 Long Beach earthquake, which damaged or destroyed numerous school buildings in Long Beach and surrounding communities, prompted the passage of the Field Act to address seismic safety concerns for school facilities.148 The Field Act requires the Division of the State Architect (DSA) to set standards for earth quake resistant design and rigorous quality control throughout the design and construction process for public schools.149 Under the Field Act, public school buildings must be designed by a California licensed Architect or Structural Engineer and submitted to the DSA for review.150 Requiring the approval of DSA for school facility plans broadened the state’s involvement in the construction of school facilities.
Growth in the student population (“the baby boom”) following WWII created an immediate need for additional educational facilities. In response, the State created the State Allocation Board (SAB) in 1947 to allocate state funds for school facility construction.151 In the beginning the SAB allocated resources for school facilities through a loan program, in which districts used property tax revenues to repay the loan.
The Legislature subsequently passed the State School Building Aid Law of 1949, which was designed to provide assistance to school districts for the construction and acquisition of new school facilities. To secure funding for the new loan program, California’s first statewide school bond initiative, Proposition 1, was placed on the November 1949 statewide general election ballot and approved by voters. The proposition authorized the sale of $250 million of state bonds to provide school districts with funds for new school construction and improvement. For the next 30 years, the state provided financing for school facilities in the form of leases and loans through the issuance of similar, voter approved bonds.
The passage of Proposition 13, however, required SAB to shift its policy focus from the loan program to the School Facilities Program152 (See B.1.2, State-Level Facility Funding).