SUBJECT: California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2014.
Current Status: 04/09/2014: In SENATE. Read second time and amended. Re-referred to Committee on GOVERNANCE AND FINANCE.
Committee: Senate Governance and Finance Committee
Hearing: 04/30/2014 9:30 am, Room 112
SUMMARY
This bill enacts the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2014 to be submitted to the voters at the 2014 statewide primary election. If approved by the voters, the Act would authorize the issuance of an unspecified amount in general obligation bonds for public library construction and renovation.
BACKGROUND
In 1988, the voters approved $75 million in state general obligation bonds under the California Library Construction and Renovation Bond Act of 1988 to establish a grant fund for the acquisition, construction, remodeling, or rehabilitation of public library facilities.
In 2000, the voters approved $350 million in state general obligation bonds under the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2000 (Proposition 14) for the purpose of financing public library construction and renovation. These funds have been fully expended.
In June of 2006, the voters rejected Proposition 81, a $600 million state general obligation bond measure, with approximately 53% of voters voting against it. Proposition 81, similar to the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2000, would have provided financing for public library construction and renovation. However, the measure would have given priority to projects that were deemed "Outstanding" for Proposition 14 funds but not funded in the third application cycle.
ANALYSIS
This bill:
1) Places a general obligation bond measure for an unspecified amount on the 2014 statewide general election ballot to finance a public library construction and renovation program utilizing a competitive grant process.
2) Authorizes the California Public Library Construction Board to adopt rules, regulations, and policies for the bond program and review grant applications.
3) Requires recipients to provide matching funds in an amount equal to 35 percent of the costs of the project and limits state funding available to a maximum of $30 million per project.
4) Establishes criteria and procedures for the allocation of grant funds.
5) Specifies intent of the Legislature that the State Librarian and the Bond Board develop an application process that is sufficiently streamlined to decrease application costs and incentivize a high number of library applicants to participate.
COMMENTS
1) Need for the bill: According to the author's office, public libraries are a vital part of the educational system. They provide resources and services for all residents of California, including preschoolers and K-12 and college-aged students. Libraries are offering essential public services such as online homework tutoring, computer-based resume building, job search programs, and literacy tutoring. The author's office indicates that in new communities, residents are demanding library facilities, and in older communities, many libraries are inadequate and are in need of rehabilitation or seismic retrofit upgrade. Additionally, several libraries lack the physical infrastructure to allow them to benefit from modern broadband technology upgrades.
2) Proposition 14. In March 2000, voters approved Proposition 14, a $350 million library bond measure. Due to high demand, the California Public Library Construction and Renovation Board was forced to deny approximately 75 percent of all applications due to lack of additional bond funding. The chart below shows the Proposition 14 grants awarded and projects funded by the California Public Construction and Renovation Board in each cycle.
Project Applications Grant Awards
Cycle # Projects State Funds Requested Projects State Funds Allocated
Cycle 1 61 $530,430,815 17 $145,395,447
Cycle 2 66 $547,149,519 16 $108,157,632
Cycle 3 72 $586,692,442 12 $80,588,293
Total Funded: 45 $334,141,372
Sq Ft.: $1,503,471
Avg. State Grant: $7,425,364
3) Needs assessment. A 2007 needs assessment, conducted by the California State Library, indicated there were more than 662 public library projects that need to be built or renovated from the 2007 fiscal year through the 2016 fiscal year, totaling over $8 billion. The State Library does not expect to complete a comprehensive update of this needs assessment at this point in time. However, the author's office estimates that the current need for statewide public library construction, renovation, and retrofit still exceeds well over $4 billion. The California Library Association acknowledges that the 2007 needs assessment has likely changed, but they still anticipate the overall need to be significant, likely in excess of $7 billion.
4) The state's funding priorities. In 2006, Proposition 81 would have required that priority be given to eligible projects that were not funded in the third application cycle of the 2000 bond program, effectively earmarking 50% of the $600 million of the funds that would have been available. This bill does not require that such priority be given to projects that were not funded in the 2000 bond program. Consequently, representatives of some of the unfunded library projects from 2000 may argue that this bill forces them to "lose their place in line" and start over in the planning process. However, rising construction costs and new building codes could effectively make the old applications outdated and support the argument that the new bond program should begin with a level playing field.
5) Infrastructure Bonds. The Legislative Analyst Office recently released its review of the 2014 California Five-Year Infrastructure Plan and raised many issues worth consideration. These issues include the state's long-term policy and infrastructure goals and how the state should prioritize competing needs for capital facilities, including transportation, K-12 education, higher education, and water resources.
The annual debt-service cost to the General Fund is estimated to be $5.6 billion in the 2014-15 fiscal year and expected to rise to approximately $5.8 billion in 2017-18. This bill would increase the annual debt-service cost to the General Fund, however the exact impact is unknown.
6) Amendments. As previously mentioned, the State Library will not be completing a comprehensive needs assessment on the construction needs for public libraries. Many will argue that the needs for both renovation and new construction are significant, especially considering the number of qualified applications that went unfunded from Proposition 14. But it has been over a decade since the state has provided resources for library construction and based on the widely differing estimates provided by the author and the California Library Association, we do not have sufficient data that demonstrates the current overall need for library construction. Therefore, staff recommends that the bill be amended to require the State Library to conduct a comprehensive needs assessment on the renovation of existing public libraries and construction for new public libraries, to be reported to the Governor as well as the appropriate policy and fiscal committees of both houses of the Legislature. Staff also recommends that the bill be amended to place the proposed bond measure on the 2016 statewide general election ballot instead of the 2014 ballot, to allow for sufficient time for the needs assessment to be completed and provided to the Legislature.
7) Prior legislation. This bill is similar to SB 156 (Simitian) in 2007, which would have submitted a measure to voters at the 2008 statewide primary election and authorize the issuance of $4 billion in general obligation bonds for public library construction and renovation. This bill was held in the Senate Appropriations Committee.
SB 1161 (Alpert), Chapter 698, 2004, placed the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2006 (Proposition 81) on the June 2006 ballot, which failed passage with 52.7% of voters voting against the initiative.
SUPPORT
California Library Association
Letters from individuals
OPPOSITION
None on file. |