LA Voters to Decide on Record $9 Billion of Bonds for Schools

(Bloomberg) -- The Los Angeles Unified School District, the second-largest in the US, is asking local voters to approve the sale of $9 billion in school construction bonds next week to modernize its aging facilities amid declining enrollment and city budget pressures.

Most Read from Bloomberg

The proposal amounts to the largest bond ballot measure the school district has ever put before voters. Revenue from the borrowing would be used to address a backlog of construction projects, install air conditioning, update Wi-Fi networks and to make spaces accessible for those with disabilities.

If approved by 55% of voters in the Nov. 5 election, the funding would be repaid by increases in property taxes that would average about $25 for every $100,000 of assessed valuation on residential properties, according to a district estimate.

The bond measure comes as the city faces a potential budget shortfall and as the school district grapples with significant funding gaps exacerbated by a shrinking student population. Advocates argue that revitalizing school infrastructure and educational services is essential to attract families back to the district, which serves a total of about 557,000 students, including areas such as adult education and charter schools. Opponents are raising concerns about the effectiveness of public spending in the face of the fiscal challenges.

Los Angeles Controller Kenneth Mejia said in a post on X last month that the city was going “broke,” noting strains on liability claims funds.

Meanwhile, the city and state are also asking voters to approve several other ballot measures that could raise the burden on taxpayers. Voters in Los Angeles will decide on a sales-tax increase to fund homelessness services. There are also statewide ballot measures that ask voters to approve an additional $10 billion of bonds for K-12 schools and community colleges and $10 billion of bonds for climate-change programs.

More than 60% of LAUSD campuses are at least 50 years old, and schools across the district have more than $80 billion “of unfunded school facility and technology needs,” according to a Board of Education report.

The school’s funding has steadily declined alongside enrollment, which has dropped from a high of nearly 750,000 in 2003-04 and is projected to keep falling. LAUSD’s 2024-2025 budget is $400 million less than the previous year’s because funding is based largely on enrollment.

Most Read from Bloomberg Businessweek

©2024 Bloomberg L.P.