California Capitolweek #510

October 13, 2000

Prop 39, Prop 35 and Online Education

Just ahead . . . tired of traffic and delays from highway construction? Then you won’t want to miss this. Will a November initiative help speed up public construction projects like road improvement? And from road construction to schools badly in need of repair. Educators try again to pass a school bond measure . . . taxpayer advocates claim it spells trouble for property owners. We’ll break down both complicated initiatives for you.  Hello I’m Melissa Crowley.  And I’m Jack Kavanagh. Those stories and more, next.

((Melissa )) In a moment, will a November initiative pave the way for the future of California transportation projects . . . or will it just be another roadblock leading to more delays? But first . . . we begin with another initiative involving construction and repair . . . Proposition 39, the school bond measure. It seems simple: lower the voting requirement for local school bonds from two-thirds to 55 percent.  But is there a catch . . .how much will it raise your property taxes if approved by voters? We went to Cahuenga Elementary School in Los Angeles to find out.

PROPOSITION 39 Report

1300 students attend class here.  The principal says that many more that live in the neighborhood wish they could.

((Lloyd Houske, Principal Cahuenga Elementary School))  We bus away 1900 children because of lack of space, so I know that all 1900 would love to come back to their school, and that would give us a total of 3200 children.

((from Political Ad)) Well, we need classrooms to reduce class size, and 39 would…

It would lower the threshold needed to pass school improvement facility bonds from a two-thirds majority to fifty-five percent, and while there’s no question that money from a bond measure could benefit students and schools like this one, there is some concern from voters about financial accountability in schools, especially when it comes to the Los Angeles school district…

((Pat Luby, AARP)) What we have in Prop 39 is two accountability audits that are built into it.  Prop 39 would insist that every school bond that’s floated, the school district would have to identify exactly what that money is going to be used for.

But opponents argue accountability protections are not in the actual proposition, but in companion legislation, and they say that 39 is no better than Proposition 26 that failed last March…

((Jon Coupal, Howard Jarvis Taxpayers Association)) It is essentially the same argument.

The Howard Jarvis Taxpayers Foundation [sic] believes local property owners would be unfairly burdened, and there’s a better way to fund school improvements…

((Jon Coupal, Howard Jarvis Taxpayers Association)) Clearly, there are going to be some property owners who are going to see massive property tax increases.  A superior method for improving schools would be to increasingly rely on state funding.

But supporters of Prop 39 say the actual cost would be minimal…

((Pat Luby, AARP)) For the average school bond in California, the average increase has been from a $1.50 to $2.50 a month to improve the schools.

Meantime, as the best way to pay for school improvements is debated, the wait for parents continues…

…And students like these will continue to walk to their neighborhood school, not to attend, but to meet and take a thirty minute bus ride across town.

((Student)) Well, we walk up here every morning, and we get bussed to another school.

END PROP 39 Report

(( Melissa  )) Proposition 26 that failed last March would have lowered the 2/3  Vote needed to pass school bonds to a simple majority.  Again,  Proposition 39 sets the threshold at 55 percent. Joining us now to face off on what is at stake for schools and what the impact on you, the taxpayer, could be if Prop 39 passes:

Pat Luby, with the AARP whose group supports Prop 39.

And Jon Coupal with the Howard Jarvis Tax Payers Association.  His group opposes Proposition 39. Thanks for joining us.

PROP 39 DISCUSSION

((Melissa)) Jon, a lot of debate on how much this could potentially cost property owners, what is the cost?

((Jon Coupal, Howard Jarvis Taxpayers Association)) Well, first of all, it is important to note that there are absolutely no limits on Proposition 39 itself.  Whatever limits there are there are in companion legislation that could be amended at any time, and, in fact, after this companion legislation was passed by the legislature, it was indeed amended to get rid of the weak caps that were there to begin with.  I think it’s important to note that the two-thirds vote protection has not been an impediment to getting school funding.  The school district that you just saw, the LA Unified School District just passed the biggest school bond ever passed in the United States, over two billion dollars, and yet they still have this problem, so the two-thirds vote has not been an impediment to getting school bonds passed.

((Melissa)) All right, Pat, is that accurate that there is no limit to how much this could potentially affect property tax owners if this goes through?

((Pat Luby, AARP)) No, actually, within the code right now, there’s debt limits that the school district operates under.  They can’t just continuously float school bonds, and we’ve looked at the school bond under Prop 39, and the accompanying language, the legislation, that went along with it.  For the average homeowner in California, the average value of a house would be about a $165,000.  Now, we’re not talking about the Bay Area or downtown LA, but across the entire state, about $165,000.  The maximum increase that they could get annually on a school bond would be about $96.  You know, most of the time, people are looking at twenty to forty dollar increases annually in school bonds, when the school bond actually passes.  Prop 39 just to pass local school bonds.

((Melissa)) And then local communities will still need to pass it.  Jon, is that a figure that you think property owners could live with?  Is that accurate in your perspective?

((Jon Coupal, Howard Jarvis Taxpayers Association)) It’s not accurate at all.  Again, if these tax limits are so integral to this proposal, why were they not put into Proposition 39 itself?  The bottom line is we’re getting unlimited tax increases through the constitutional amendment, which is Prop 39 itself, but these debt limits or rate caps are in legislation that can be amended at any time.  Not only can they be amended at any time, but the statutory rate caps that are in there can be waived by the California Board of Education, upon which one of the supporters of Prop 39 sits.  Reed Hastings is a promoter of Prop 39, and he sits on the California Board of Education, and, so, the limits can be waived at any time.  The reason that this proposal is being advanced is because, as the promoters have admitted, it’s a way to raise twenty billion dollars.  Twenty billion dollars does not work out to a pittance.  It works out to massive property tax increases across the state of California.

((Melissa)) All right, Prop 26 and 39 are similar.  This time around, though, the Governor got on board.  How key is his support here, Pat?

((Pat Luby, AARP)) Well, it’s not just Governor Davis, it’s Governor Wilson.  I mean, we have bipartisan support from many legislative leaders, but those two fellas—Governor Wilson helped reduce class size.  When you reduce class size, you have to have more classrooms, plus we have our normal growth in California with our expanding population.  We have to have more classrooms and places to put these kids.  Half our students are going to school in classrooms that are over thirty years old.  Half our classrooms, you can’t hook up a computer because the electrical system won’t handle it.  You know, we’re the leading state in the country.  We definitely have to have good school facilities for our kids.

((Melissa)) All right, one thing that I know you two agree on is that improving schools is a priority, but, Jon, your group feels that there are other ways to do so, including sharing the cost throughout the state, maybe a state bond?

((Jon Coupal, Howard Jarvis Taxpayers Association)) A statewide bond has the advantage of not coming with a tax increase, and it’s a funding mechanism that does not discriminate against property owners.  That’s the key with a local bond.  A local bond always comes with a tax increase, and that tax increase discriminates against property owners.  The first alternative would be a statewide school bond of ten to twenty billion dollars, or we could use some of the fourteen billion dollar surplus that we have in this state to start building schools tomorrow.

((Melissa)) Now we did talk about that—

((Jon Coupal, Howard Jarvis Taxpayers Association)) Yeah, we don’t have to wait until subsequent elections.  We could start building schools tomorrow.  We—

((Melissa)) What about the surplus, though, Jon?  We know that California has had periods of recession where it’s not always a reliable source.  Is that that why the other side feels it is so important to have this passed on the local level, Pat?

((Pat Luby, AARP)) Actually, the Governor did put over a billion dollars into schools out of this year’s surplus, so it’s not like he’s ignoring the surplus as a way to add funding to education, but the AARP, we’re the world’s largest organization of grandparents; we’re the world’s largest organization of taxpayers, but the things that we’re interested in as taxpayers, is making sure that we have accountability.  We don’t just want to send money to Sacramento.  We want to be able to control it locally.  Local school bonds are critical to making sure that local voters know exactly what’s going to be done.  Under Prop 39, we know that you’re going to put a new roof on that school.  You’re going to put a new electric system in that school.  You’re going to add classrooms to that particular school.  I can see that because it’s my neighborhood.  If I just send money to Sacramento in a general state bond, I have no idea whether it’s going to LA or San Francisco or my hometown.

((Jon Coupal, Howard Jarvis Taxpayers Association)) The accountability provisions that you claim come with 39 are not in 39 itself.  The citizen oversight committees, the debt limits, the ability for taxpayers to sue for noncompliance, none of those provisions are in Proposition 39.  This is really nothing more than a Christmas tree with ornaments all around it, to try to fool the voters to adopt a tax increase.  If school funding is critical, and it is, let’s go with something that does not discriminate against property owners and something that does not clearly magnify the differences between rich and poor districts.

((Melissa)) All right, guys, we’re in our final minute here, and we want to make sure that you both have time to get in a final word.  What happens if this does not pass, Pat?

((Pat Luby, AARP)) Well, we’re going to have a lot of kids sitting in portable classrooms.  We’re going to have a lot of kids that’ll be bussed out of their districts.  You know, sixty percent of property taxes are paid by corporations.  It’s California’s corporate leadership that’s supporting Proposition 39.  This is not just taxpayers.  This is all of us together trying to improve schools.

((Melissa)) Jon, quickly, your final thoughts.

((Jon Coupal, Howard Jarvis Taxpayers Association)) Yes.  The voters have repeatedly made it clear, as late as last March, that they like the two-thirds vote.  It is a reasonable protection to protect property owners.  The money is there from other sources.  [With] the multibillion dollar surplus, we can start building schools tomorrow.  Enhancing a system or magnifying a system that is unfair to local property owners is not the way to go.

END PROPOSITION 39 DISCUSSION

(( Melissa  )) Pat and Jon thanks for joining us. We would like to know what you think about Proposition 39.

Do you think lowering the voter requirement for school bonds is a good idea, or will it hurt taxpayers? Send us an email to CapitolWeek dot org or a letter to the address on your screen. Now . . . education on the internet.

We’ve talked about improving performance in the classroom, but what about using the internet to further your education? Our partners at Wired News argue the pros and cons of “virtual classrooms.”

((Jay Greenspan, Wired News)) There’s been a lot of progress in on-line education.  A lot of schools and companies are seeing it as a huge opportunity, but I guess there’s the question of how good it is.  Is it a good replacement for the classroom?

((Judy Bryan, Wired News)) Yeah, well, the obvious thing is you don’t have the social interaction with the other kids in the classroom.  Of course, if you’re one of five kids in a household, you have a lot of social interaction, but I think online education is best for professionals who are going back to school, you know, someone who wants to get an MBA or a little extra coursework to get a promotion at work.  Online education is perfect for that because you can study during your lunch break, go home from work, and get in a couple hours of whatever.

((Jay Greenspan, Wired News))  Yeah, if you work 8 to 6, you don’t want to traipse off to class, you don’t get home ‘till ten o’ clock, and then you have to do homework the next time around.  Interestingly, I’ve taken technical classes, programming and stuff like that, and I’ve found that even for something like that being in the classroom is so helpful because it’s the other students who you learn from.  You know, the questions they ask are the questions you might ask, and you learn from that, from their queries, and I just don’t see how that could be replicated online.

((Judy Bryan, Wired News))  Well, it could be in a chat room, but what couldn’t is saying, “I really enjoyed what you were saying during the lecture.  Let’s go have a cup of coffee, or let’s go have lunch, or let’s get a study group together.”  You know, it’s just that spontaneous conversation that people have face-to-face and that human interaction.  Certainly, I like that, and I need that, so I’m a little skeptical that I would want to take classes online.

((Jay Greenspan, Wired News))  Yeah, but it’s definitely getting to the point where you can probably get through an entire MBA or advanced degree entirely online.  Whether you’d want to or not—well, for some people, it’s probably the best way to go.

((Judy Bryan, Wired News)) Well, it’s also for foreign students, someone in another country who wants to go to an American university or who wants to attend an American university, can do that via the web.

((Jay Greenspan, Wired News)) Yeah, and location matters so little, you can really go to any class at any university in the country at that point.  You know, whoever’s got the best deal, the best fit, for you.

((Judy Bryan, Wired News)) Study with the best teachers and save a lot of money.

END PLUGGED IN—ONLINE EDUCATION

((Jack)) For more information you can log onto our partners website at wired dot com.  On now to an initiative drawing less attention than others, but what’s at stake impacts us all.  The battle over Proposition 35 comes at a time when traffic problems are increasing, and lawmakers have boosted transportation spending by billions of dollars.  It involves lifting restrictions on the use of private contractors on public projects.  Jennifer Fischer has this story.

But the no side says that the measure will actually delay work by extending the bidding process, and it changes the constitution…

…In simple terms, a yes vote on Proposition 35 will give state departments the power to contract with private architectural and engineering services at any time, not just under special circumstances, which is the way it is now…

Steve Hopcraft represents “No on 35” and says that eliminating the special circumstances clause would be disastrous.

((Steve Hopcraft, “No on 35”))  We should not let one single interest group exempt themselves from this important constitutional protection.  It will lead to corrupt contracting.

With the state ready to invest billions of dollars in public works projects, especially for transportation, Caltrans in on the spot.  According to Nick Deluca, Caltrans faces a backlog of roadwork and can’t handle anymore projects…

((Nick Deluca, “Yes on Prop 35”))  What’s important, I think, to understand about this amendment is that it doesn’t require the state or local governments to do any contracting with the local sector.  What it does is make sure that they’re allowed to do that if they choose, so it gives them the choice to, essentially, make the best choice for a given job.

Caltrans didn’t have a comment for this story…

State departments generally use their own civil service staff when it comes to public works projects like rebuilding a bridge or a highway…

((Steve Hopcraft, “No on 35”))  Thousands of projects are awarded every year to hundreds and hundreds of engineering consulting firms.  It’s a thousand alone this year at Caltrans, but that’s not enough for them.  They have to show that they have some public benefit under the current state law and they want to exempt themselves from that.

But private contractors say it’s not only about existing projects.  They just want a fair shot at the new ones.

((Nick Deluca, “Yes on Prop 35”))  The conditions for contracting out are so stringent and so difficult, and not to prevent cronyism or conflict of interest, but essentially to prevent contracting out.

I’m Jennifer Fischer for California Capitolweek.

(( Jack  ))  Joining us now for more on Proposition 35.  Ted Toppin, an independent consultant.  He represents the “no on proposition 39” side. And Carol Evans, senior policy analyst for the California Taxpayers Association.

((Jack)) Why can’t we get this solved?  Why does this problem keep coming up on the ballot?

((Carol Evans, California Taxpayers Association)) Well, that’s why we have Proposition 35 on the ballot, to get this solved once and for all.  It is a very straightforward and positive initiative that will give state and local government managers the flexibility to use private sector engineers and architects if it’s appropriate to do so, just like other states already do.

((Jack)) Ted, is this the old feud of business versus labor?

((Ted Toppin, “No on 35”)) No.  This is a special interest trying to amend the constitution for their benefit and not the benefit of the taxpayers.  I mean, Proposition 35 eliminates constitutional safeguards against corrupt contracting for a single special interest.  The large engineering firms that paid to put it on the ballot.

((Jack)) I didn’t know that we had a corrupt contracting problem.

((Ted Toppin, “No on 35”)) We don’t because sixty-five years ago voters, in their infinite wisdom, approve an initiative that eliminated the spoils system from government contracting and said that if you’re going to contract out, if you’re going to hire people to do work for the state, you have to show it’s cost effective, speeds delivery, or somehow benefits the taxpayer.

((Jack)) If I were to look at a list of the benefactors or supporters or the financial backers of this initiative from your side, who would be the organizations that I would see?

((Carol Evans, California Taxpayers Association)) As far as supporters, we have over four hundred organizations—

((Jack)) Who’s the biggest?

((Carol Evans, California Taxpayers Association)) Financially?  It’d probably be engineers in the state.

((Jack)) Uh, union engineers or—

((Carol Evans, California Taxpayers Association)) Private sector engineering firms.

((Jack)) Ted, if I were to look at your list of contributors, what would be the big names at the top?

((Ted Toppin, “No on 35”)) You would see publicly employed engineers, but you would also see private engineers who oppose this because it would delay—

((Jack)) Would I see union engineers?

((Ted Toppin, “No on 35”)) Absolutely.

((Jack)) So contracting out is business versus union, again?

((Ted Toppin, “No on 35”)) I would contend this is the taxpayer versus a large engineering interest seeking to amend the constitution, eliminate a requirement to show that these projects are cost effective.  You know, this measure doesn’t require competitive bidding for multimillion dollar public works projects, and when you do that, you’re going to put taxpayers on the hook for hundreds of millions of dollars.

((Jack)) If Prop 39 [sic] passes, what will happen?

((Carol Evans, California Taxpayers Association)) What we’ll see is a speedup in project delivery.  We’ll see more things done faster because right now Caltrans doesn’t have enough engineers.  There’s more than enough work to go around for the public and private sector, so we’ll see public and private partnerships delivering projects faster, saving taxpayers 2.5 billion dollars per year, and creating forty thousand new jobs.  That’s why our support is so very broad across the state.  It’s a very positive initiative.

((Jack)) I misspoke, it’s Prop 35, obviously.  If it doesn’t pass, what happens?

((Ted Toppin, “No on 35”)) If it doesn’t pass?  California currently—Caltrans and every state and local agency contracts out for this work, and they do it under a system that protects taxpayers.  Projects have to come in at a fair price.  They have to be bid.  They have to be issued in the public benefit.  These folks are trying to amend our constitution to rewrite the rules for themselves and themselves only.  This applies only to engineering contractors.

((Jack)) If we’ve got these billions of dollars of contracts backed up in the system, that means then that state is going to have to go out and hire extra people to do this engineering work.

((Ted Toppin, “No on 35”)) And they are indeed doing it.  Contracting out doubles in this budget at Caltrans alone.  It’s a combination of—

((Jack)) We’re in a labor shortage situation.  Are we going to be able to find these people?

((Carol Evans, California Taxpayers Association)) No.  Even Gary South, the Governor’s Chief of Staff, has said Caltrans can’t possibly do the work.  They can’t hire enough people to do the work.  We need to use both the public and the private sector together to get the jobs done so we can start relieving our congestion problems in the state.

((Ted Toppin, “No on 35”)) And we’re doing that under rules that benefit taxpayers.  Are contracts cost effective?  That’s the question that our constitution asks.  Are these contracts to be bid?  That’s something that’s currently required in California, and this measure does not require it.  I mean, this is a recipe for these folks to get rich but not to speed up project delivery and not benefit taxpayers.

((Jack)) Most of the people watching this are not professional engineers, so we need to find out what it’s going to do for people who are not professional engineers.  If I pass this thing, will it reduce the gridlock on the 405 for me?

((Carol Evans, California Taxpayers Association)) Sure, because it means that we can get projects designed faster.  We can get the construction going faster, so we’re going to be relieving traffic congestion that much faster.  We have hundreds of projects that are approved, but we don’t have the designs ready.  That’s why we need both public and private working together.

((Jack)) Same question, Ted.  I mean, are you going to be able to reduce that gridlock on the 405 or the 680 or whatever?

((Ted Toppin, “No on 35”)) The solution to our gridlock problem is resources, and the Governor has moved to address that.  If this passes, it proposes a new, undefined selection process that one top regulatory expert, Ed Heidich, Pete Wilson’s former OEL Director, said it’ll take eighteen months to implement this measure, and in the interim, the public contracting process would come to a halt, and that’s why organizations like the California School Board Association, the Association of California School Administrators.  Dozens and dozens of school districts around the state have opposed it because it will delay school construction and increase the cost of those projects.

((Jack)) Do you buy that, Carol?

((Carol Evans, California Taxpayers Association)) Don’t buy it, not one bit.  The argument is built on a house of cards that assumes new regulations will be required.  No new regulations have been required.  We’ve been to court over it already.  The court has clarified that no new regulations—everything in place right now that we have in handling private contracts remains in force under Prop 35.

((Jack)) If Proposition 35 passes, will you come back with another initiative later?

((Ted Toppin, “No on 35”)) I’m not proposing this initiative.  The large engineering contractors that Carol represents are proposing it.  The Governor has said that he has all the tools to deliver on all these projects, and he’s the one who should be held accountable.

((Jack)) If it’s defeated, will you be back again with another measure?

((Carol Evans, California Taxpayers Association)) We’re really hoping this is going to pass.  This is very positive.  We’re urging a yes vote on this.

(( Jack )) Thank you Ted Toppin and Carol Evans. We would like to hear where you stand on Proposition 35.

Should private contractors be allowed to bid on public projects? Send us an email or drop us a line to the address on your screen. Melissa?

(( Melissa  )) Thanks Jack.  Earlier we talked about Proposition 39, the school bond measure and how supporters say it would help improve our public schools. Well the Department of Education has released the academic performance index, which is The yardstick for measuring school improvement. Schools that improve can share 677 million in state reward money. Schools that did not improve face the threat of state intervention. About two thirds of the schools that participated did improve. A few weeks ago in an interactive special we introduced you to Princeton Elementary school in Delano, California. We’re happy to report that Princeton Elementary, as well as all 8 schools in that district met all their performance goals.

If you want to check on a particular school’s performance, log unto the Department of Education website. The address . .   c-d-e dot c-a dot gov

((Jack)) Time now for some viewer feedback on last week’s segment on violence and the media.

Mary Ellen wrote: “ Violence and sexuality dominate most all programming. Decent programming has been removed.”

An anonymous viewer agreed, that person wrote, simply:  “ there is entirely too much violence on TV.”

We thank you for those comments.