California Governor’s School Building Overhaul Meets Resistance

Managing Editor

California Gov. Jerry Brown is pushing a plan that would channel hundreds of millions of dollars into schools for energy efficiency upgrades, though that proposal is meeting resistance in Sacramento.

The governor, a Democrat, wants to devote about $450 million next year to the energy upgrades, money made available by California voters’ approval of a statewide tax initiative last fall.

In November, voters by a wide margin gave their blessing to Proposition 39, which increased the state corporate tax for a five-year period. It was an electoral result that was largely overshadowed by other measures on the ballot, including one that passed and was expected to help California schools stave off budget cuts.

Proposition 39 requires that half of the annual revenue raised by the measure, or up to $550 million, be transferred into a Clean Energy Job Creation Fund to streamline energy efficiency and usage across a wide variety of public facilities, including schools.

In his proposed budget for next year, Brown, who also served as governor from 1975 to 1983, is calling for all of the proposition’s energy-efficiency money to flow into school districts and community colleges, rather than, for instance, public hospitals and other taxpayer-owned buildings. Schools and community colleges would get an estimated $450 million in 2013-2014, and $550 million annually for the next four years, under Brown’s blueprint.

If approved, the plan would amount to the biggest capital investment in California schools since the mid-1990s, according to Brown’s administration. The governor’s argues that devoting the money to the state’s schools will make up for years of lean K-12 budgets, help districts reduce costs through lower utility bills, and promote renewable energy.

But state lawmakers appear to be bucking the governor’s plan. At a recent legislative hearing, legislators voiced concerns about why the energy money couldn’t be allocated more broadly, including to other universities, or for spending that they said might have a greater impact on job creation. (A video of the hearing is available online.)

“We have to define what our mission is here,” state Sen. Jim Beall, a Democrat, said at the hearing, “and that’s to get our energy efficiencies, but also to look at this as an economic development tool.”

The state’s nonpartisan Legislative Analyst’s Office also views the plan with skepticism.

The governor’s plan “excludes consideration of other eligible projects that potentially could achieve a greater level of energy benefits,” the office argued in a recent analysis. “For example, large public hospitals have a relatively large energy load. In contrast, schools are typically open for only part of the day and generally either closed or partially closed in summer months.”

The office also questions whether the governor is correct in counting Proposition 39 revenues toward the state’s calculation of Proposition 98 funding—a minimum level of state and local funding provided for schools and community colleges.

The analyst’s calls that proposal a “serious departure” from established state budgetary practices. Revenues should not be included, the office argues, if that funding cannot be used for general purposes, such as because of restrictions created by voter-approved measures on ballots.

Brown’s plan is also “directly contrary to what the voters were told in the official voter guide as to how the revenues would be treated,” the analyst’s office argues.

H.D. Palmer, a spokesman for the California Department of Finance, says the governor “strongly disagrees” with those critiques, and argued that money from the statewide initiative is general-fund revenue.

“We think the law is clear about how these revenues have to be calculated,” Palmer told Marketplace K12.

Palmer also said that Brown’s plan would have economic benefits for businesses and communities across the state, as schools hire companies to redesign and revamp schools.

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