Funding Educational Technology Through the Use of Ed-Tech Bonds

California has adopted the Smarter Balanced Assessment System designed by the Smarter Balanced Assessment Consortium, an organization formed to create assessments aligned to the Common Core academic content standards. This transition to the Common Core State Standards Initiative was initiated by Assembly Bill 484, signed by Governor Jerry Brown on October 2, 2013.

The Smarter Balanced Assessment System uses computer adaptive tests, which may require school districts to upgrade school technology to support online testing and have access to digital curriculums and materials. A school district’s preparation for online assessments may include such things as upgrading its computer systems and increasing the size of its Internet bandwidth. However, many districts cannot afford to fund such equipment out of operating budgets.

One solution supported by the California Association of School Business Officials (CASBO) for funding these technology needs has been the use of short-term bonded debt instruments, known as Ed-Tech bonds. Ed-Tech bonds propose a repayment schedule of three years. The short length of repayment characteristic of Ed-Tech bonds matches the useful life of computer equipment, which normally lasts two to five years with heavy use.

For a school district to incur bonded indebtedness, a governing board must properly draft a ballot measure certifying it has evaluated such things as information technology needs and then receive a 55 percent approval by voters in favor of issuing the bond. Proposition 39, also known as the “Smaller Classes, Safer Schools, and Financial Accountability Act,” amended the California Constitution in November 2000 and reduces the number of votes required to approve any bonded indebtedness proposed to be incurred by a school district for the “construction, reconstruction, rehabilitation, or replacement of school facilities” from two-thirds to 55 percent. (Committee for Responsible School Expansion v. Hermosa Beach City School District (2006) 142 Cal.App.4th 1178, 1184.)  Among the requirements in California’s constitutional provision for school district bonds, a bond ballot measure must include a list of the specific school facilities projects to be funded and certification that a school district board has evaluated information technology needs in developing its list. (See Cal. Const., Art. XIIIA, § 1, subd. (b)(3).) CASBO interprets Ed-Tech bonds to fall under Proposition 39’s requirement that districts have 55 percent voter approval prior to such bonds being issued.

California and 16 other member states of the Smarter Balanced Assessment Consortium are expected to administer the new online testing assessments to measure student achievement on the new Common Core academic standard. The Ed-Tech bond financing proposal is just one option districts have considered to prepare for this new testing system upon examination of current technology resources.

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