Oregonians will vote in the May 18 primary election on two measures to expand and clarify the bonding authority of public schools, community colleges and universities seeking to buy, build or improve facilities.
Measure 68 would add a new article to the Constitution, permitting the state to raise matching money through general obligation bonds for local school district projects, much as it does now for community college and university construction.
A significant hitch, however, is the state has no matching money. And it probably won't through the 2011-13 biennium, said Rep. Peter Buckley, D-Ashland, co-chair of the Joint Ways and Means Committee.
The state will put money into a matching fund created by the measure, Buckley said, when "the state is back on firm financial footing."
A second proposal, Measure 69, amends the state Constitution to make it clear colleges and universities can use general obligation bonds to buy buildings as well as build them.
A strong bipartisan majority of the Legislature referred both measures, which have drawn broad support from education groups, including the Oregon Education Association and Oregon School Board Association. Neither measure faces organized opposition.
Measure 68 would allow the state to match money raised by local districts through voter-approved bonds for school capital projects. The Legislature would still need to define details for the change, such as how much of a match the state would offer.
The measure broadens the definition of capital costs to include furnishings, equipment, maintenance and repair, which cannot now be purchased with bond money, said Steve Meyer, economist with the Legislative Revenue Office.
It also creates a "school capital matching fund" to replace a similar fund now within the state education stability fund. Up to 15 percent of state net lottery proceeds can be funneled into the matching fund, but only after the stability fund reaches capacity.
The stability fund's capacity is set at 5 percent of state general fund revenues, or about $586 million. But with only about $183 million projected by the end of the 2009-11 biennium, there won't be any money to spill into the matching fund.
While the matching money is theoretical for now, the broader definition of capital costs would help local districts immediately, said Bobbie Regan, a member of the Portland school board and president-elect of the Oregon School Boards Association.
For example, districts may be able to use bond money to buy equipment such as desks and book shelves, pave parking lots and do other maintenance which they now finance with operating money, she said.
House Speaker Dave Hunt, D-Gladstone said the new bonding authority used by public schools in more than 40 states -- would be especially important to districts with high growth or a large number of old schools. It also would help rural districts with smaller tax bases.
Measure 68 "is critical to maintain the safety and security and educational value of public K-12 school buildings," Hunt said.
Advocates also say the measure would help local school districts replace or upgrade aging buildings that have been damaged by fire or floods, or that threaten the health of students and teachers with mold, asbestos, leaky roofs and broken furnaces.
By amending the Constitution to give colleges and universities explicit authority to use general obligation bond money to buy buildings, Measure 69 could save universities millions in lower interest rates and building costs, university officials say.
The Oregon Institute of Technology in Klamath Falls, for example, could buy and remodel a Wilsonville building for its satellite programs in the Portland area for about $30 million rather than spending $50 million to build from scratch. In addition, using general obligation bonds would save $2 million in lower interest payments.
The measure also modernizes language to reflect universities' interest in more complicated, mixed-use buildings that might include research facilities, classrooms, offices, outside tenants and retail stores, such as some of the newer buildings at Portland State University, said Jay Kenton, the Oregon University System's vice chancellor for finance and administration.
The Oregon University System does not expect a flurry of expansion as a result of Measure 69, Kenton said, but the mechanics for purchases and construction will be "simpler and clearer," and that alone would reduce legal costs.