Among the other ballot initiatives drawing Californians to the polls this November are an assortment of bond propositions. But will citizens be willing to take out yet another mortgage on the state to repair its crumbling infrastructure?
From the state that brought you Proposition 13 (no tax hikes without voter approval), California's political establishment has come up with a new take on the revered "tax and spend" model—"borrow and spend." In this case, the beneficiaries are the state's roads, highways, parks, sewer systems, schools and levees—just about anything you can throw concrete at.
Propositions 1A (Transportation Funding Act), 1B (Highway Safety Traffic Reduction Act), 1C (Housing and Emergency Shelter Act), 1D (Kindergarten Public Education Facilities Bond Act), and 1E (Disaster Preparedness Bond Act) have not attracted nearly as much notoriety as the hotly contested Propositions 86 and 86, but the outcome of these campaigns could have an instant effect on California residents. With the exception of Prop 1A, which is a Legislative Constitutional Amendment, Prop 1B, 1C, 1D, and 1E are each Legislative Bond Acts.
The difference is simple: A legislative amendment is added to the state constitution, a Legislative Bond Act provides funding for various projects. The interest over a 30 year period on the bonds will be a substantial cost to the state.
Proposition 1A-Currently there are two state gas taxes: an 18-cents per gallon excise tax, and a 6% sales tax. In 2002 voters approved Prop 42 which allocated most sales tax money to specifically fund transportation projects. But the state has used the Prop 42 money twice for budget hardships, which was approved under the proposition in cases of emergency. Prop 1A tightens those emergency situations and limits the conditions under which the gas and sales tax revenues can be suspended for transportation uses. It also would require borrowed funds to be paid back in three years and it will limit suspensions to twice in a 10-year period.
While Prop 1A is a tax, Proposition 1B provides $20 billion to be spent on highways, roads, local transit and rail. It also addresses the need of improving goods transportation and security. Paying back the bonds, with interest, would cost an estimate $38.9 billion over 30 years.
According to California Transportation Commission Chair Marian Bergeson, both proposition 1A and 1B will have a tremendous effect on the state's economy if passed. One of the primary supporters and signer of both measures, Bergeson claims everyone will benefit.
"Our roads and highways are in serious need of repair. Although the money seems like a tremendous infusion, it is really only a drop in the bucket. Construction costs are substantially increasing and if we wait any longer, we will not be saving any money," says Bergeson.
Citing a tremendous problem with commerce, Bergeson explains that port and rail congestion will only increase due to the vast amount of imported goods being delivered through the state. She stresses the importance of developing the state's highway and railway capacities. "This would clear the way for trucks and rail cars that move the goods," she claims.
"We've already begun addressing the infrastructure problems and many of the projects are underway. The bonds will allow us to continue towards completion."
Proposition 1C provides $2.85 billion to fund 13 new and existing housing and development programs. Parks, sewer systems in urban areas, affordable homeownership programs for moderate income homebuyers, and multi-family housing developments. This measure will cost the state an estimated $6.1 billion in principal and interest over 30 years.
Proposition 1D provides funding for modernization of schools from kindergarten to university level. It would benefit K-12 public schools with $7.3 billion and another $3 billion for community colleges, the CaliforniaState University and the University of California. The cost to the state is estimated to be $20.3 billion over 30 years.
Proposition 1E addresses the flood problems of the world's fruit basket. According to the position statement the Central Valley Flood Control System and Delta levees are in need of serious repair. This measure would raise$ 4.09 million. $3 billion to repair and improve levees, while almost $800 million would be allocated to projects outside the Central Valley. Another $290 million would be used to create and enhance flood corridors.
According to Deborah Howard, spokesperson for Let's Rebuild California, the organization representing the supporters of Props 1A thru 1E, the legislature put politics aside on these legislative bond initiatives.
"The bonds were developed between the legislature and the governor. The legislature sat back and put political differences aside and got these on the ballot. They are not a fix all, but at least they are a step forward," says Howard.
Bill Leonard, District 2 Member of the State Board of Equalization doesn't agree. As one of the sole signers of the opposition's statement Leonard feels a 'pay as you go' policy would be more prudent for the taxpayers.
"I can't see paying a dollar for services and almost a dollar for interest over the long term," says Leonard. "This is a time for fiscal discipline and to set up an infrastructure account. We need to look at a way to avoid paying large sums of debt. I'm against expensive bond issues."
Both Howard and Bergeson felt that borrowing thro-ugh the sale of bonds was the right tack to take. Howard puts it in the simplest of terms: "When you own a home and you need to do repairs, you take out a mortgage. You pay interest. A bond issue is a mortgage."
Only Tuesday will tell whether Californians are ready to take out that new mortgage.
About John FoleyJohn Foley is a freelance journalist, writer and editor from San Francisco, California.