REPORT: SCHOOL FUNDS BETTER SPENT ON ROADS.

Byline: Terri Hardy Daily News Sacramento Bureau

The state Legislature should reconsider its practice of providing billions to build new schools, and instead put more of its money into repairing California's crumbling highways, universities and other facilities, state officials said Monday.

A report released Monday by the nonpartisan Legislative Analyst's Office found that a larger portion of the state's general fund is spent on debt repayment for school districts' facilities than on the state's Public Works projects.

For the state to maintain its own buildings and roads, it needs to rethink its priorities and boost spending for such projects from 0.3 percent of the general fund to 6 percent, the report's author said.

``We need to recognize that the state has responsibility for its own facilities,'' state analyst Chuck Nicol said in an interview. ``It needs to be determined to what extent we participate in funding local needs, like schools, and whether it's affordable from a state perspective.''

Other officials, however, say cutting state expenditures for schools may not be greeted favorably by lawmakers who are aware of polls showing education is a top concern of voters.

``The state shouldn't back away from funding new schools. There is a huge need that has been underfunded for years,'' said Assemblywoman Kerry Mazzoni, D-San Rafael, chairwoman of the Assembly Education Committee.

Bill Hauck, president of the nonprofit statewide advisory group California Business Roundtable, agreed, saying that while it might not be an ideal situation, schools have become dependent upon the state for construction funds.

``Until that changes, the state must play a significant role,'' Hauck said. ``I don't see how the state can walk away at this point.''

The state's annual debt payment for schools will increase from $850 million to $1.2 billion over the next five years, comprising 1.6 percent of the general fund. Even after the expenditure of $6.7 billion in bond money that voters approved in November, California schools will continue to have a ``multibillion-dollar need'' for new construction and renovation, the report said.

At the same time, the report says in the next decade, the state must spend tens of billions of dollars fixing its aging highway system, universities, hospitals, parks and libraries.

Also, the state will need to funnel billions more into Public Works projects to handle expected growth, as the state's population is projected to nearly double by the year 2040.

Nicol said it will be up to Gov.-elect Gray Davis and the Legislature to establish priorities.

The report finds that the state has no master plan for determining its building and renovation needs, and has no well-defined budgeting process for financing them. The report recommends an overhaul by establishing a legislative committee devoted to overseeing development and financing of projects.

Mazzoni said it is crucial that a planning process be set into place and agreed that it is prudent to set aside 6 percent of the general fund for Public Works projects. To allow school districts to raise more money themselves, she is proposing a constitutional amendment to lower the school-bond vote requirement from two-thirds to a simple majority.