The Possibility of Green Fiscal Mutualism in California

• In Event: Constructing New Visions in K-12 School Finance: The Past, Present, and Future of State Interventions into District Finances

Abstract

Three entities in the state of California provide for a horizon of possibility for public education finance: (a) California's green bank, composed of the IBank and State Treasury Office; (b) California's teacher pension system, CalSTRS; and coalitions of labor unions and movements for educational justice in the state. This paper is a sketch of how these entities might work in tandem to provide public investment for green school infrastructure in California. Using the framework of fiscal mutualism, the paper examines the political and fiscal regimes necessary to use existing state banking and borrowing authorities to derisk teacher pension investment in green school bonds issued by school districts in the state. If movement coalitions were able to pressure teacher pension managers to apply for monies from the green bank that would encourage the pension to purchase those bonds, school districts could potentially see savings, technical resources, and other protections from the ravages of direct exposure to the school bond market and the unreliabilities of state funding for school facilities. Particularly in a time of climate collapse and growing risk from climate change, green fiscal mutualism in California stands as one potential pathway towards a new political economy of infrastructure financing. In the paper, we provide historical and political background on each entity involved in the green fiscal mutualism plan, converging finally on specific proposals for campaign strategy, specifically: targets, allies, short-term demands, and policy details. Our hope is that the paper could serve as the basis for future campaign organizing and also extend imaginaries for other states and districts looking for alternatives to the status quo of school infrastructure financing.

Authors

• David Isaac Backer, Seton Hall University

• Mia Fullerton, Reed College