CASE STUDIES: BOND FUNDING

Davis Wants Passage Of A Revised Prop. 26

Sacramento Bee
Thursday, April 6, 2000
Section: MAIN NEWS
Page: A3

By Emily Bazar Bee Capitol Bureau

-- For the second time in a year, an initiative that would make it easier to pass school construction bonds may be put before California's voters, but this time Gov. Gray Davis has agreed to play an active and substantial role in the campaign.

Silicon Valley business leaders who spent millions trying to pass Proposition 26 in March have been negotiating with the governor to put a modified version of the initiative on the ballot, one that would lower the voter requirement in school bond elections from two-thirds to 55 percent.

Absent from the mix, at least from a financial standpoint, is the California Teachers Association, a major contributor to the Proposition 26 campaign.

Millionaire Reed Hastings said the decision to pursue a modified Proposition 26 will be made by the end of next week. He believes voters, who rejected the plan to lower the voting threshold to a simple majority, will be willing to support this version because California's school children still desperately need new and better schools.

"Everybody is cognizant that 51 percent of voters said they didn't like (Proposition) 26," Hastings said. "But this is a different proposal. You could say it's not revolutionarily different, but that's because the school facilities problem hasn't changed."

Though the initiative isn't yet a sure thing, officials with the Howard Jarvis Taxpayers Association, the primary opponent of Proposition 26, already are preparing to fight.

"I think the reaction of the voters, if it qualifies, will be, "What part of "no" don't you understand?' " said Jon Coupal, president of the taxpayers group. "I wasn't planning on going back into battle this quickly, but we'll be ready."

Proponents, including business leaders like Hastings and the CTA, spent at least $24 million on Proposition 26, which lost by less than 2 percentage points in the March primary.

Should a modified version make it to the November ballot, the teachers' association is not expected to play a large role. Though union president Wayne Johnson said CTA members are likely to support the initiative's concept, he said they probably won't commit major financial resources to the battle.

Instead, the union expects to pour its resources to fight the school voucher initiative that is expected to qualify for the ballot and another measure that would require California to boost its per-pupil spending.

Johnson believes a modified Proposition 26 could actually hurt the union's chances to defeat vouchers because voters might confuse the two issues.

"We'd be pushing one initiative to say yes and fighting another to say no," he said. "If they go ahead and do this, then we think they could conceivably be creating problems for us with the voucher."

Johnson, who had criticized Davis for not doing enough to support Proposition 26, added that he and others are baffled by the governor's turnaround. "We're dismayed at his behavior and his sort of flopping around on these issues," he said.

Davis spokesman Michael Bustamante countered that Davis was active in the Proposition 26 campaign. Should the modified initiative make it to the ballot, he said, there's a "strong possibility" the governor would co-chair the effort.

The governor "is intent on trying to get this passed and moving the ball forward," Bustamante said.

According to Hastings, Davis has said that in addition to changing the voter threshold to 55 percent, he would like to boost measures to hold school districts responsible to voters when bonds succeed. Davis has suggested that the initiative contain provisions requiring local citizen oversight boards, limiting the amount of debt a school district can assume and publishing audits of school districts in local newspapers.

But before the governor can start campaigning for the measure, Hastings said, he and others must decide whether it is financially feasible -- they want to find more big-money donors -- and whether they can gather approximately 1.2 million signatures by May 7 to qualify. The cost of gathering the signatures could come to about $5 million, he said.