Builders hopeful on two propositions' business impact.

But many businesses oppose school voucher initiative

California builders are hoping that two ballot propositions going before voters Nov. 2 could boost real estate development and construction employment.

Bob Rivinius, chief executive of the California Building Industry Association, explained that he believes approval of Proposition 170 -- which allows passage of local school bond proposals by a simple majority of voters, rather than a two-thirds majority -- would boost home construction by lowering the fees that school districts charge to homebuilders for school construction.

"The more affordable homes are, the more we can build," said Rivinius. "It keeps builders in businesses, and that means jobs."

CBIA also favors Proposition 173 -- the California Housing and Jobs Investment Bond Act -- which would permit the state to sell $185 million in bonds to finance a mortgage-insurance program to assist first-time home buyers.

Meanwhile, local business people are opposing Proposition 174 -- the school voucher initiative.

Voters statewide next month will decide the fate of seven ballot propositions. Of the seven, the aforementioned three are of particular interest to the business community:

* Proposition 170 would shift the cost of school construction from the state and from residential developers (and their home buyers) onto local property owners.

Historically, a majority of voters in California school districts vote in favor of local bond issues to finance school construction, but rarely by the two-thirds percentage now necessary for passage.

Because of the shortfall in school construction funds, local governments have imposed builders' fees on new developments to finance the building of schools. State law caps the fees at $2.65 per square foot of residential space and 27 cents per square foot of commercial space.

This ballot proposition would lower the percentage of voters needed to approve bond issues for school and community-college construction or rehabilitation to a simple majority. It also would eliminate a law that repeals the cap on development fees if a statewide school-bond measure is defeated.

"We have had a schools task force in our association for seven years to deal with the problem (of development fees)," said Rivinius. "We acknowledge and accept that there is going to be some construction fees; our real interest is that it be equitable."

Rivinius said CBIA feels it would be fair to have one-third of the cost of school construction come from the state, one-third from local bond issues and one-third from development fees.

The California Senate Office of Research concludes that passage of Proposition 170 also would speed up school construction, since "state resources have lagged behind construction needs triggered by rising school enrollments; a backlog in applications for school construction approaches $7 billion."

The California Chamber of Commerce also supports Proposition 170.

The proposition is opposed by various taxpayers organizations and by Richard Close, president of the Sherman Oaks Homeowners Association. Some homeowners feel the proposition would unfairly allow renters to approve taxes that would be paid only by property owners.

* Proposition 173 would free up the sale of $185 million in bonds, approved by voters in 1982 to reduce interest rates on mortgages for first-time home buyers, for a new program that would instead provide mortgage insurance for low- to moderate-income people buying their first home.

Mortgage insurance reduces the amount required for a downpayment on a home.

Rivinius said the proposition would spur housing starts, provide construction jobs and stimulate the economy.

Opponents say the proposition would mean more mortgage defaults (which the state program would have to cover) because minimal down payments mean higher monthly mortgage payments, plus the cost of the mortgage insurance premiums.

Proposition 173 is also supported by the Los Angeles Area Chamber of Commerce and the California Labor Federation, AFL-CIO.

* Proposition 174 -- the Parental Choice in Education Initiative -- would amend the state Constitution and require the state to provide a scholarship voucher of about $2,500 for each school-age child, which could be redeemed at a private or public school that accepts the child.

Most of the debate on this initiative has focused on the issues of separation of church and state, the benefits of competition, the possible impacts on inner-city schools with falling enrollments due to "white flight," and the possibility of unqualified individuals starting small schools to qualify for voucher funds.

Proponents of 174 include the California Libertarian and Republican parties. Opponents include the California Democratic Party, teacher groups, labor and school board members.

But earlier this month, Los Angeles business groups joined the opposition movement. The Los Angeles Area Chamber of Commerce, the Valley Industry and Commerce Association and the Regional 2000 Partnership denounced the voucher initiative.

"Basically, we would be giving up on the public school system," said Ben Reznick, chairman of the San Fernando Valley's VICA. "Business depends on a strong public education system because that's where you educate the work force in a large sense."

Reznick said the voucher initiative would take billions from the budgets of public schools and give it to private schools and the state's general fund. Public education would suffer, he said, and California would be left with a less educated future work force.

"At a time when we're trying to get business to either stay here or come to Southern California, this is the wrong message to be sending to the business community," said Reznick.

He added that "a lot of people in the business community who are opposed to this are supportive of other types of voucher systems."

VICA favors school choice, said Reznick, but not under the type of system being proposed in Proposition 174.

Other propositions on the Nov. 2 ballot are:

* Proposition 168 which would amend the state Constitution to limit requirements for local voter approval of low-rent housing projects.

Voter approval would be required only if opponents gathered signatures to place a referendum on the ballot, or if the project was eligible for federal funding and could have a significant negative impact on a public agency's revenues or the physical appearance of a community.

This proposition is supported by various housing groups, city and county governments, and is opposed by the California Libertarian Party.

* Proposition 169 to allow a single bill accompanying the state's annual budget act to include all changes in law necessary to implement the budget. It would give the governor line-item veto power over the budget-implementation bill.

* Proposition 171 to permit the transfer of the base-year value (for property tax purposes) of property substantially damaged by disaster to a comparable replacement property acquired in a different county within three years of the disaster.

* Proposition 172 which would continue the half-cent sales tax increase to pay for local public safety services.

In order to balance the state budget, the Legislature earlier this year shifted property tax revenues from cities and counties to schools. Part of that tax shift would be made up by continuing the half-cent sales tax and earmarking the money for local law enforcement budgets.