The San Diego Unified school district has reaped less and less from a $2.1 billion school construction bond as the financial crisis hurt San Diego housing values. Now that crisis threatens to completely stall school construction.
When San Diego Unified drew up its plans for renovating and building schools with bond money three years ago, it assumed housing values would grow 5 percent every year. Under the bond, voters allowed San Diego Unified to collect a property tax of $66.70 for every $100,000 a house is worth. Higher housing values bring in money faster.
But after the housing market crashed, the school district realized its assumption was too optimistic. San Diego Unified redrew its plans and delayed projects because the money was coming in slower than expected. That same money goes toward paying off the debt from another, earlier bond that built schools.
But the housing market hasn’t picked up. The shortfall in bond money has continued, getting so bad that school district administrators and a watchdog committee are urging San Diego Unified to halt construction. The district has already stopped awarding new work.
Lee Dulgeroff, who oversees the bond, says financial experts estimate that San Diego Unified will only reap enough money to pay off the debt from the last bond, leaving it no money to take on new projects.
The Union-Tribune reports the suspension will halt four major classroom construction projects until the district figures out how to finance them. The district is trying to refinance debt from the earlier bond to free up more money, but the U-T points out that could be harder now that San Diego Unified has gotten its credit rating downgraded by two different agencies.
Delaying the projects also means San Diego Unified will likely have to pay more for them, since prices go up with time. The ultimate fear is that the school district won’t be able to build everything it promised.
The timing is bad for San Diego Unified. The district is now exploring a new bond measure to help with its budget woes. Though bond money can only be spent on school construction and renovation, San Diego Unified hopes it could free up money for classrooms by using the money for billions of dollars in overdue repairs that are now paid for from its day-to-day budget.
The idea of a new bond already faces opposition. If San Diego Unified puts construction and renovation for the existing bond on hold, it’ll be much harder for boosters to make their case for new borrowing.
We’ll keep following this story to see what happens to school repairs and construction. The school board is slated to consider a plan to refinance the bond debt in early December. Have burning questions that we haven’t answered? Please email me or post them in the comments!
Emily Alpert is the education reporter for voiceofsandiego.org. What should she write about next? Please contact her directly at firstname.lastname@example.org.
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