California sued over bond program that sends more money to fix facilities in wealthy school districts

A public-interest law firm filed a lawsuit Thursday against the state of California, charging that its program to subsidize school construction perpetuates vast inequalities for students in low-wealth communities.

Public school students in some districts’ splendid campuses enjoy modern science labs, shaded outdoor spaces, and spacious auditoriums, while their peers in other districts attend rundown schools in deplorable conditions. At the heart of this issue is the state’s reliance on local property taxes in districts with vastly different abilities to finance school facility renovations, the lawsuit said.

The losers — property-poor districts — disproportionately enroll low-income students, English learners, and Black, Hispanic, and Native American students, the lawsuit said. And it added that the state’s formula for contributing to districts’ efforts has compounded that problem.

“It is district wealth, not student need, that too often dictates whether students have access to safe, functional facilities,” said the lawsuit, filed in Alameda County Superior Court.

“The California Constitution promises every student a safe, clean, and equitable education. That includes the buildings we learn in. Right now, that promise is being broken for students like me and thousands of others across the state,” said Miliani Lexani Rodriguez, a senior at Coachella Valley High School and the named plaintiff in Miliani R. v. State of California, during a press conference.

Filed by San Francisco-based Public Advocates, the lawsuit seeks a complete overhaul of the School Facility Program and its formula for distributing funds for renovating school buildings. The lawsuit does not include funding for new construction, which does not show similar disparities.

There was no immediate comment from the California Department of Education and the Office of Public School Construction, among the agencies named in the lawsuit.

Seventeen plaintiffs are named in the lawsuit, including students, parents, teachers, and organizations encompassing disadvantaged districts throughout the state. They range from Del Norte Unified School District to Calexico Unified and include San Bernardino Unified, Stockton Unified, Salinas City Elementary School District and Lynwood Unified.

The 39-page declaration details the school conditions that led to the lawsuit:

• Portables that leak, exposing children to puddles and black mold at the 100-year-old Lincoln Elementary in Salinas City Elementary School District, whose school kitchens are too small and ill-equipped to cook the fresh vegetables grown on bountiful fields surrounding the district.  
• Buckets catching rain in dozens of classrooms in Lynwood Unified, where a lack of shaded spaces outdoors and cramped cafeterias force students out into the rain in winter and a scorching sun in summer.
• Poor ventilation and malfunctioning air conditioning, broken bathroom sinks and windows at Coachella Valley High, built in 1916, and playgrounds closed because of safety hazards at some of Coachella’s elementary schools.
• Rundown facilities in Stockton, where outdated science labs limit instruction at Edison High, students are cramped in old portables during the day and rats roam at night, and potential ankle-spraining holes in athletic fields make them unusable.

Those districts are among hundreds that cannot raise enough money through property taxes to create safe, healthy, modern and inspiring learning environments, the plaintiffs claim. They patch and repair, triaging facilities that in many cases should be torn down and rebuilt.

Homeowners and other property owners in many of those districts often face higher tax rates than property owners in wealthy districts, which can spread the costs of upgrades and repairs across a bigger tax base. “These high-wealth, low-need districts’ projects consequently can afford to be more numerous and more ambitious,” the lawsuit said. Without factoring in relative need, the School Facility Program then subsidizes those projects.

Tale of two districts: One superintendent’s experience

Gudiel Crossthwaite knows first-hand about the impact of those disparities. Until last summer, he was superintendent of Lynwood Unified in Los Angeles County. Damaged by historic redlining and state highway construction that lowered property values in its largely Hispanic and Black neighborhoods, Lynwood has one of the lowest amount of taxable property per student. This fall, Crossthwaite became superintendent of one of California’s wealthiest districts, Sunnyvale School District, in the heart of Silicon Valley with one of the highest amount of taxable property per student.

“One of my first meetings in Sunnyvale was at Bishop Elementary. I was inspired and in awe of how beautiful the facility was – having matching furniture, technology in place, the grounds with trees and grass and places for kids to relax in the shade,” he said.

“If you’re in Lynwood, and it’s 97 degrees and you don’t have running air conditioning or adequate HVAC systems for six, seven hours a day, and you’re supposed to focus on your learning,” he added, “It’s difficult to do that when you’re hot and sweaty and uncomfortable. That’s just a very simple thing.”

Last year, Sunnyvale passed a $214 million bond to continue upgrading its facilities. The projected impact on Sunnyvale homeowners was $15 per $100,000 of assessed value. Last year, Lynwood passed an $80 million bond, which will fall well short of renovation needs. Lynwood property owners will pay $50 per $100,000 of assessed value.

Seeking a remedy

The lawsuit asks that the court order the Legislature and Gov. Gavin Newsom to fully overhaul who is eligible for facility modernization aid and for how much.

Instead of addressing funding inequities, the lawsuit said the State Facility Program replicates them by providing nearly the same matching share to most districts. For new construction, the state splits the cost with districts. For renovations, the state pays 60% of an eligible project’s cost, and the local share is 40%. Since districts with a larger tax base can issue bigger construction bonds, they have grabbed the lion’s share of state funding since the program was created 27 years ago.

In its study of state funding over the past 25 years, the Center for Cities + Schools at UC Berkeley found that districts with the most assessed value per student on average received two and a half times more state funding than districts like Salinas City Elementary, Lynwood and the other plaintiff districts, with the least state funding per student.

Public Advocates’ threat in 2024

Public Advocates warned it might sue the state over the issue last year in a demand letter to state officials in the hope that it would prod action. The Legislature made modest tweaks to the formula used by the School Facility Program in writing Proposition 2, a $10 billion bond proposal that state voters passed in November 2024. Prop 2 includes a slightly larger state match for some districts and sets aside more money for smaller districts. And it broadened the criteria for districts with the lowest total assessed property values to qualify for “hardship” assistance, which the lawsuit dismissed as having “only illusory relief.”

But the first-come, first-served matching system remains largely intact. It has favored larger districts like Los Angeles Unified and wealthy smaller districts that can employ their own planning staff and consultants, enabling them to line up first for funding. Their projects will likely be funded, but if Prop 2 follows patterns of past state bonds, it won’t come close to meeting the demand. Other districts that miss the cutoff — some with urgent renovation needs — will have to wait in line for a future state bond to be reimbursed. And that may be years away.

Prop 2 “made minor adjustments” to the state program, “none of which alone or together meaningfully alter the systemic historic inequities” that low-wealth districts face, the lawsuit said.

Ties to Serrano v. Priest

The legal case for filing the lawsuit dates back a half-century. In a series of rulings in the 1970s known as Serrano v. Priest, the California Supreme Court held that financing school operations through property taxes violated children’s constitutional right to an equal educational opportunity.

The court ordered the Legislature to provide more funding to low-income districts. Several iterations of expanded state funding later led to the Local Control Funding Formula, one of the nation’s most equitable systems for funding school operations.

But the Serrano lawsuit did not include school districts’ capital expenses. And so the underpinnings for a parallel case, a bookend to Serrano, have lain dormant.

But the arguments for changing the system have grown over the past decade based on data. In a series of studies that examined the distribution of state matching money and districts’ ability to raise construction bonds, the Center for Cities + Schools at UC concluded, “Equitable funding to modernize school facilities is the great unfinished work of the State’s school finance revolution.”  

The Public Policy Institute of California reached similar conclusions after researching the issue. “School Facility Program funding has disproportionately benefited more affluent students and districts. Per student state funding has been highest in the districts with the fewest high-need students,” researchers Julien Lafortune and Niu Gao wrote in 2022.

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In 2016, then Gov. Jerry Brown opposed the first-come, first-served approach to state funding and refused to support the $9 billion state bond on the ballot; voters passed it anyway. In 2019, Gov. Newsom also criticized the matching grant formula, and held up moving a bond forward until his staff negotiated modest changes; voters defeated the $15 billion bond, poorly timed at the start of the Covid pandemic, in March 2020.

Michael Kirst, a Stanford education and business professor, who Brown turned to for advice in 1975 on addressing Serrano v. Priest, said school facilities weren’t viewed as an issue then, but agrees it is well past time to address them now.

“The issue has flown under the radar for so many years,” said Kirst, who co-authored the Local Control Funding Formula. “We need to complete the job of making California school finance more equitable. This is a long-overlooked and needed area for political action.”

Adds Supt. Crosthwaite, “States in the South have figured this out, and here in California, we tout ourselves as being more progressive. The reality is a majority of kids of color in low-income communities are in spaces that are not inspiring, not secure. We’ve got to do better.”