Election 2016 FAQ: Proposition 53, Public Vote On Revenue Bonds
Proposition 53 requires voter approval for any project paid for with $2 billion or more in revenue bonds See a list of all our proposition explainers here.
The Broadway show “Hamilton” tackles debt in a rap battle in which Hamilton and Jefferson skewer one another in rhyme. It’s a passionate exchange on a topic that would otherwise put us to sleep. But, as Hamilton points out, debt is how government borrows money to get things done.
And that’s what makes the subject of Proposition 53 — an otherwise snoozy topic — contentious. Everyone from firefighters to cities to water districts are lined up in opposition.
Right now, the state has to seek voter approval to sell general obligation bonds for projects like buildings and highways because those bonds are repaid with taxpayer money from the state’s general fund.
But revenue bonds, for the most part, don’t get repaid with general fund dollars. They’re called revenue bonds because the projects they fund generate income from people who use them; it’s that revenue that pays off the bond. A toll plaza, for example, collects the money to pay for a highway.
What you're voting on
Proposition 53 would require voter approval whenever the state wants to pay for a public works project using more than $2 billion in revenue bonds.
The measure specifically defines “state” to exclude cities, counties, school districts and community college districts, which would seem to excuse them from this requirement. But Proposition 53 also would require voter approval if the state is a partner in a project.
And that’s what concerns local governments, which sometimes partner with the state to get a better interest rate on bonds, says the Legislative Analyst’s Office. City and county officials are concerned Proposition 53 could delay critical projects such as bridge and freeway repairs, and put decisions about them in the hands of voters statewide. Firefighters are concerned that there’s no exemption for disasters, and that could delay rebuilding critical infrastructure after an earthquake.
Who are the supporters and opponents?
Proposition 53 would affect just two current projects: high-speed rail and Gov. Jerry Brown’s Delta tunnels. And the measure’s backer is a longtime opponent of the tunnels.
Delta farmer Dino Cortopassi and his wife, Joan, are spending millions to bankroll the campaign for Prop. 53. Cortopassi insists in the press that the measure has nothing to do with his opposition to Brown’s tunnels. He says it’s meant to force lawmakers to be honest about the cost of expensive public works projects, and to give taxpayers — who will ultimately pay for the project through user fees — a say in how much debt the state takes on.
Fiscal impact — by the League of Women Voters of California Education Fund
The effect is hard to predict. There probably won’t be very many projects using revenue bonds that cost $2 billion or more. Very large construction projects could be affected, such as high-speed rail or regional water systems. The cost will depend on whether voters approve specific bonds and, if they don’t, whether the state decides to pay for the project in a different way.
Supporters say — by the League of Women Voters of California Education Fund
- The state should be required to get voter approval before taking on expensive building projects.
- Proposition 53 would give voters a voice and hold the state accountable for its spending.
Opponents say — by the League of Women Voters of California Education Fund
- Having to wait for an election could make it hard for the state to respond to disasters and emergencies.
- Voters from across the state should not be able to decide what is best for a project that affects a local community.
How much is being spent on the campaigns?