SACRAMENTO — California lawmakers advanced a bill Monday that would prevent taxpayer money from being used to promote local bond measures.
It is illegal for school districts to use tax dollars to hire political consultants to pass bond measures. But critics say municipal finance firms include campaigning in their package of bond services when they contract with the districts. They recover the costs through other fees.
“The local agencies then in effect are using taxpayer funds to pass bond measures that the taxpayers must pay back,” said Assemblyman Don Wagner, R-Irvine, who is carrying the bill seeking to halt the practice. “That is illegal when done directly.”
Wagner’s legislation would prohibit school districts and other local agencies from contracting with firms that provide campaign services for bond measures.
The Assembly approved AB621 on a 51-10 vote, with Democrats casting the votes in opposition. It now heads to the Senate.
School districts throughout California have drawn scrutiny recently for bond contracts. A firm hired by Placentia-Yorba Linda Unified School District was extensively involved in the approval of a 2008 bond and charged the district above-average fees, according to reports from the Orange County Register.
State Treasurer Bill Lockyer has asked the attorney general to issue a legal opinion about whether districts have illegally contracted to promote bond measures. Lockyer and the California Association of County Treasurers and Tax Collectors support Wagner’s proposal.
The Small School Districts’ Association opposes the legislation, saying it would make it more difficult for smaller districts to pass bond measures.
Last month, the Assembly passed a bill that would restrict the use of high-cost school bonds that prevent districts from paying off the debt before they mature. That bill, AB182, limits the ability of school districts and community colleges in issuing so-called capital appreciation bonds.