California sets  billion in state bond measures; Bay Area adds  billion more

California sets $20 billion in state bond measures; Bay Area adds $20 billion more

California sets  billion in state bond measures; Bay Area adds  billion more

California’s presidential election in November will feature $20 billion in statewide bond measures, and $20 billion more in a regional bond election.

At the state level, lawmakers reached agreements last week on two $10 billion general obligation bond measures that were headed toward floor votes this week.

The measures were proposed as Senate Bill 867a $10 billion statewide elementary and secondary school construction bond measure, and Assembly Bill 247a $10 billion climate bond measure.

Signs outside a polling station in San Francisco
A sign outside a polling place in San Francisco in March. Voters there will consider a $20 billion regional housing bond in November, in addition to another $20 billion in state GO bonds.

Bloomberg News

These measures will compete for attention at the ballot box in what some expect to be a record year for school district bond measures, in an election already fueled by a $20 billion regional housing bond measure in the San Francisco Bay Area.

State-level measures were presented as Senate Bill 867a $10 billion statewide elementary and secondary school construction bond measure, and Assembly Bill 247a $10 billion climate bond measure.

Supporters say the school bond would improve the lives of millions of children and modernize public schools, while the climate bond would fund clean water, wildfire prevention and recovery projects.

“These bond measures are critical to the future of this state, investing in our children and their neighborhood schools, and ensuring that communities large and small have access to clean water and are safe from wildfires,” said Sen. Pro Tem Mike McGuire, D-Healdsburg.

The Senate leader added that he ran for school board at the age of 19 after watching his high school fall into disuse.

“Our students, teachers and staff deserve better, especially those in underserved schools where resources are limited and facilities are outdated and sometimes dangerous,” McGuire said.

Proposition 51, the last statewide bond measure to support school construction, was approved by voters in November 2016 and has long since run out.

If the statewide school bond measure passes, local districts will need matching funds to secure state money.

“I think we’re going to see a record number of GO school bond measures on the ballot in 2024,” said Adam Bauer, president and CEO of municipal advisory firm Fieldman, Rolapp & Associates.

In 2020 and 2022, the number of school bond measures on the ballot was low and the need for school construction funding has remained, Bauer said.

“In 2024, school districts have been stepping up their efforts to make up for the lack of bond measures proposed in previous cycles,” he said.

He confirmed that school districts are encountering situations where they don’t have enough money for projects because they haven’t passed a bond in a while.

“That’s exactly right, and they’re hopeful that the state will put a measure on the ballot to help with matching funds,” he said.

Regarding the statewide climate bond initiative, McGuire said the communities he represents have been devastated by wildfires. Ensuring that communities in the state have the resources to protect themselves from wildfires, droughts and floods is “critical to the long-term success of the state,” he said.

“Our historically underserved communities on the front lines of the climate crisis could not afford to wait any longer, requiring us to act with urgency to strengthen California’s climate resilience,” said Assemblymember Eduardo Garcia, D-Coachella, who co-chaired the Assembly’s climate bonds working group with Assemblymember Lori Wilson, D-Suisun City.

SB 867 would direct a minimum of 40% of bond funds to disadvantaged communities.

The money would be divided seven ways: $3.8 billion for clean water, drought and flood protection; $1.5 billion for wildfire and forest resilience; $1.2 billion to address sea level rise; $1.2 billion to protect biodiversity; $1.55 billion for creating parks and outdoor recreation areas; $450 million for extreme heat mitigation; and $300 million for climate-resilient ranches and farms.

The climate bond would invest in “our future by prioritizing critical needs like access to safe and affordable drinking water, wildfire prevention, extreme heat mitigation, sustainable agriculture and clean, renewable energy,” Wilson said.

Adam Bauer, President and CEO of financial advisory firm Fieldman, Rolapp & Associates
“I think we will see a record number of GO school bond measures on the ballot in 2024,” said Adam Bauer, president and CEO of Fieldman, Rolapp & Associates.

Fieldman, Rolapp & Associates

The $20 billion regional general obligation bond measure in the San Francisco Bay Area would help build or preserve 90,000 affordable homes across the nine-county region, supporters say.

The Bay Area Housing Finance Authority Board, a regional board made up of local elected officials, unanimously agreed at its June 26 meeting to place the Bay Area’s first regional housing bond on the general election ballot.

According to the California Association of Realtors, only 17% of homebuyers in the state can afford a single-family home with a median price of $814,280, and 24% can afford a condo or townhome with a median price of $655,000. Housing Affordability Report published on May 9.

To qualify for a single-family home, according to CAR’s calculations, buyers need to earn $208,400 annually to make monthly payments of $5,120, including principal, interest and taxes on a 30-year fixed-rate mortgage with a 6.86% interest rate.

San Mateo and Santa Clara, two counties in the BAHFA region, are the first and second most expensive areas to buy a home, according to CAR.

If approved, $10.4 billion would go toward building 36,000 affordable homes, $3 billion would go toward preserving 14,000 existing affordable homes and $6.6 billion would be used as flexible financing to preserve and provide buyer assistance for 22,000 homes, according to a report.

Under current law, the BAHFA measure would require approval by at least two-thirds of voters to pass. The bonds would be repaid from ad valorem property taxes in the nine-county region.

But state voters will also consider Assembly Constitutional Amendment 1, which would set the voting threshold for approval of bond measures for affordable housing and infrastructure at 55%. According to BAHFA, if ACA1 passes, the authority’s bond measure would only need a 55% voting threshold.

“Today’s vote is the culmination of many years of effort by so many people across our region,” said BAHFA President Alfredo Pedroza, Napa County Supervisor. said in a statement“The Bay Area’s long-standing housing affordability issues affect all of us – our friends, our neighbors and our family members.”

The bond measure would divide 80% of the funds among the nine counties (and the cities of San Jose, Oakland, Santa Rosa, and Napa, each of which has more than 30% of its county’s low-income housing needs), in proportion to each county’s tax contribution to the bond. The remaining 20%, or $4 billion, would be used by BAHFA to establish a new regional program to fund affordable housing construction and preservation projects throughout the region.

The measure would also create a citizen oversight committee and an account for bond proceeds. The committee would report to BAHFA and the executive boards of the Association of Bay Area Governments. There would also be an annual independent audit.

It remains to be seen whether voters will have the same enthusiasm for approving the bond measures that the authors have for the programs they would support.

David McCuan, a political science professor at Sonoma State University, noted that Gov. Gavin Newsom and lawmakers have already made efforts to ease the burden on voters. Manage some legislative initiativesinstead of presenting them to the voters.

“There could have been 22 to 24 statewide initiatives on the ballot; instead there will be nine to 11,” McCuan said.

“There is already a lot to bear in voters’ pockets, and it is a conflict-ridden election year,” he said.

Consider all the attention being paid to the battle between former President Donald Trump and President Joe Biden, he said.

“Bond measures have been fairly successful locally over the last 10 or 15 years, but California has been getting closer to the debt ceiling on bonds,” he said. “When you have that situation, it’s easier to get a no vote than a yes vote.”

Local ballot measures, including but not limited to school taxes and bonds, have achieved a 70% approval rate, and statewide measures have seen a 33% to 38% approval rate over the past 10 years, he said.

McCuan expects that tax measures, bond measures and measures to change voter thresholds will not be as successful as in the past. If they once garnered 70 percent of the vote, he predicts that the average approval rating will fall to 50 percent.