Election years can be stressful; especially when you are trying to decipher the propositions that will have a strong impact on your industry. Proposition 51 is exactly that for construction professionals. We broke it down to the three things construction professionals should know about Prop 51.
About Prop 51
Proposition 51 is the California Public School Facility Bonds Initiative that will be on the November 8th 2016 ballot.
Prop 51 authorizes $9 billion in general obligation bonds for new construction and modernization of K-12 public school facilities, charter schools and vocational education facilities and California Community Colleges facilities.
The fiscal impact requires state costs of about $17.6 billion to pay off both the principal ($9 billion) and interest ($8.6 billion) on the bonds. Payments of about $500 million per year for 35 years.
1. Yes on Prop 51 vs. No on Prop 51
A “yes” vote supports that state issuing $9 billion in bonds to fund improvements and construction of school facilities for K-12 schools and community colleges.
A “no” vote opposes the state issuing $9 billion in new debt to fund the improvement and construction of education facilities.
2. Where does the construction industry stand?
Over the past six months Prop. 51 has earned endorsements from both the California Democratic and Republican parties, constitutional officers Gavin Newsom and Tom Torlakson, and industry groups such as the California Chamber of Commerce and the State Building and Construction Trades Council of California.
3. How Will This Bill Directly Affect the Construction Industry?
Simply: Level 2 School Fees vs. Level 3 School Fees
If the November Bond Measure does not pass this year, we could see Level 3 fees. School fees are currently around the $3.36 a SF (Level 2). If the bond does not pass, we could see Level 3, which would cause the fee to double – $6.70 a SF.
So, if you are trying to decide what to think about Prop 51 and how it relates to your industry… share this article along, and hopefully it can assist you and your company in making an informed decision.