Every election cycle I post my voter guide, which not only covers candidates but also the bond measures that California voters have to decide on. This year I am not going to do that and instead urge all California voters to vote NO on every bond measure on the ballot.
The proposition process has gone from being a tool the citizenry could use to redress wrongs and set priorities in the absence of leadership from Sacramento. Instead of the proposition process being the voice of last resort for the People, it is now a tool for politicians and interests groups who cannot get what they want through the legislative process.
Propositions are regularly loaded up with loophole language that is the ballot equivalent of Congressional pork, carve-outs that apply to specific organizations or interests and serve to pervert the original purpose of the measure behind the bond. The backers of these propositions count on voters not reading the lengthy and often complex voter guide that is mailed to every registered voter, and by attaching a lofty title to the proposition and some flowery introductory language, along with an avalanche of television and mailer advertising, well most of these measure end up passing.
Yet both expenditures are perfectly legal, local twists in California’s high-stakes bond-measure game. Fred Silva, an expert on bond measures and a senior fellow at California Forward, a nonpartisan group trying to improve state governance, says the loopholes are always spelled out in the fine print — 61 pages of which are jammed in back of California’s November 4, 2008, Official Voter Information Guide. “It’s really a buyer-beware situation,” Silva says.
[From Reading the Fine Print: How to Spot the Loopholes, Legal Doozies and Loose Phrasing in California’s Ballot Initiatives – News – LA Weeklypage 1 – LA Weekly]
California is already on the hook for over $100 billion of debt (aka “bonds”) and the ultimate cost to taxpayers when including interest is typically 2x the face value of the bond. We have something like $51b in bonds already sold and another $54b in authorized bonds that have yet to be sold, meaning the interest rate for the authorized but unsold bonds has yet to be set. A recent bond auction, recent as in recent weeks, was oversubscribed only after the State increased the interest rate to 4.25% (versus Fed Funds Rate of 1.5%) and keep in mind that there is a tax advantage for buyers of state bonds and on top of all that, these are short term bonds. The conclusion is that the cost of borrowing is skyrocketing and this will affect every bond measure that is on the ballot.
There is another way to look at the bond issues. If the cost to taxpayers is 2x the face value, what that means is that the taxpayer sees only 50% of his/her tax dollar going to the issue they are voting in favor of.
If I told you that Prop 1A for high speed rail between Los Angeles and San Francisco will cost $20 billion and $10 billion of that will be for interest and another $1b will go to things that are not part of the construction process like “environmental studies, planning, and preliminary engineering activities,” and another $1b will go to regional transit authorities for intercity rail projects, and $250 million will go to “administrative costs,” would you be quick to vote in favor of that proposition? This is exactly what the Prop 1A high speed rail measure provides for, it’s all right there in the 7 point italic font of the voter guide.
You can be in favor of high speed rail and be against this bond measure knowing that of $20 billion of California taxpayer money, only $7.75b will go to building a high speed rail system… do you really believe that a high speed rail system linking 400 miles between 2 major cities in the state can be built for $7.75 billion (btw, rebuilding 1/2 of the San Francisco Bay Bridge will cost $6.5 billion)?
It is long overdue that voters exhibit some fiscal discipline in the face of a lack of it coming from government. When asked to vote on a measure that will result in your tax dollars being spent, ask yourself what you are buying and do the research rather than just taking your education from a 15 second tv spot.