Proposition 53 – Costitutional Amendment Requiring Voter Approval of Issuance of Any Revenue Bonds Over 2 Billion Dollars.
Currently California requires voter approval of all “general obligation bonds” (those repaid through state general fund revenue including taxes) but not “revenue bonds” (those repaid through fees generated by user fees, such as bridge tolls, rider fees etc.). In other words, State bonds that are repaid primarily through tax revenues must currently be approved by voters, while those intended to be repaid without affecting the State’s general fund are not. This allows legislators to agree upon issuance of bonds that will build, repair, or enhance infrastructure and the like that generates revenue and then use the revenue that is created by the project to repay the bond.
This proposition seeks to change the State constitution to require voter approval of revenue bonds over 2 billion dollars. The proposition is financially backed by $6 million in private funds from one couple and is backed by a single legislator, 22 taxpayer groups and no groups with any other affiliation (i.e. business, finance, banking, etc.). It is opposed by the Governor, five civic organizations, nine environmental groups, the coalition for Adequate School Housing, 12 government organizations, four public safety groups, five healthcare organizations, nine infrastructure groups, four taxpayer groups, 18 separate water districts, 53 business associations, and a nearly limitless number of unions.
The only known newspaper endorsing the Proposition (10 are currently opposing) correctly notes that even though revenue bonds are supposed to be covered by revenue generated through fees paid by users of the bond project, they are guaranteed by the state. So, they reason, voters should have a say in the decision. Setting aside that none of the examples the Victorville Daily Press provides actually involve a California State obligations (they list one city obligation and several a few out-of-state examples), their argument has some logical holes. First, voters do already have a say on these bonds, they elect legislators to represent them and make good decisions on these issues. Second, and more importantly, we think the paper is wrong in its assumption that voters are better arbiters of these issues than the professionals they elect to perform that job.
For longtime readers, you know that we don’t “buy” the largely rhetorical argument that our elected officials are all “crooks and idiots.” We actually think that on the whole professional legislators, even those with misguided agendas, generally make better and more reliable decisions than voters who commonly decide ballot measures either based on advertisements, on the ballot name, or on what their friends are doing. If that analysis sounds jaded to you – it is. We think that the possibility that voters in Visalia, Eureka, and King’s Beach will sufficiently educate themselves as to whether a hypothetical bridge construction project in San Diego is worthwhile is slim. We believe that almost no voter actually spends the time to research voter initiatives and that even those that do (namely our readers) are more likely to make a mistake based on misinformation than are professional legislators and their staff. We’d much rather legislators make these important calls (admittedly we might feel the same way about general obligations bonds, but that questions isn’t before us).
While for us this measure is not a “close call” we do think one more issue is relevant to the analysis. The Modesto Bee (we are often fond of their analysis) correctly notes that the legislative analyst observes that currently very few revenue bonds would qualify under this measure (because of its high 2 billion dollar threshold) – the two known bonds that would qualify are the L.A. to S.F. bullet train and the Delta Tunnels projects (designed to create tunnels to carry water between Northern and Southern California. Both of these projects are supported by Governor Brown and both are opposed by the Cortopassi family (past Koch Brothers contributors) who have single-handedly funded this measure. If this measure is a back-door effort by one family to torpedo these two deals (and we think the cited news article makes a compelling case) it marks one of the more egregious misuses of the proposition process that we have seen. Whatever you feel about these two projects we think that changing the State Constitution to remove power from the legislature and impose more burdens on voters is a lousy idea.
Recommendation: Strong NO