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By Jon Coupal
Voters confronting candidates and ballot measures this November should know that excessive government debt, at the national, state, and local level, should be getting a lot more attention than it does now.
This column has previously reviewed the state and local bonds appearing on the November ballot as well as a measure designed to make passing future bonds far easier.
To recap, there are two statewide bond proposals of $10 billion each. Proposition 2 is a $10 billion statewide school bond supported by developers in the naïve hope that it will reduce the pressure for even higher “impact fees” imposed by government entities as a condition for residential construction. Proposition 4 is a $10 billion “climate bond,” a mishmash of projects that have absolutely nothing to do with the climate.
Second, while there are numerous local bond proposals throughout California, they pale in comparison to the massive $20 billion regional “housing” bond proposed for the nine Bay Area counties. Unlike the two statewide bonds, the Bay Area Housing Financing Agency (BAHFA) bond will be repaid exclusively by property owners in just 9 of California’s 58 counties. Chew on that for a minute.
But here’s the kicker, while not a bond proposal itself, Proposition 5 is an even greater threat to California property owners because it lowers the vote threshold for local bonds from two-thirds to 55%. The two-thirds vote requirement for local general obligation bonds has been in the California Constitution since 1879 as a protection for property owners against excessive debt being approved by those who don’t own property.
Even worse, Proposition 5 is retroactive so the lower vote threshold applies to the massive $20 billion BAHFA bond appearing on the November ballot. Voters who mistakenly believe that the two-thirds vote for local bonds will apply to local bond measures this election are in for a rude awakening if Proposition 5 passes. Going forward to all future elections, Proposition 5 will indisputably open the floodgates to higher property taxes.
To read the entire column, please click here
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