BILL ANALYSIS
ACA 3
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Date of Hearing: July 1, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
ACA 3 (Blakeslee) - As Amended: June 16, 2009
Policy Committee: ElectionsVote:7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This measure proposes to amend the California Constitution to
prohibit any initiative authorizing general obligation bonds in
an amount exceeding $1 billion unless the measure expressly
provides for additional tax or fee revenues and/or the
elimination of existing programs to fully fund repayment of the
bonds, as determined by the Legislative Analyst.
The new revenue source or programs eliminated must be clearly
identified in the initiative title and summary.
FISCAL EFFECT
1)One-time General Fund costs of about $220,000 to include an
analysis of the measure and arguments for and against the
measure in the statewide voter pamphlet.
2)To the extent this measure's requirement reduces the amount of
general obligation bonds proposed through initiatives and
subsequently approved by voters, there would be reduced
General Fund costs for debt service payments.
3)Except for Proposition 98 payments to fund K-14 education,
debt service payments for general obligation bonds are
otherwise the state's highest priority for General Fund
expenditures. Rising debt payments can therefore implicitly
"crowd out" funding for other General Fund programs. Under
the provisions of this measure, debt payments on bonds
exceeding $1 billion and approved by initiative would be
provided by explicitly identifying those General Fund programs
to be reduced to offset the debt service payments, unless the
bonds were proposed to be funded with an additional tax or
ACA 3
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fee.
COMMENTS
1)Purpose . According to the author, "The state's current
financial crisis is exacerbated by the ballot-box budgeting
promoted by ill-conceived measures sold to voters who often do
not receive adequate information to understand the
consequences of the initiative."
"Under current law, wealthy special interests are able to fund
sophisticated signature gathering campaigns to place
initiatives on the ballot using general obligation bonds to
fund their pet projects. If passed, these outside interests
are able to elevate their projects above every other budgetary
priority, threatening the Legislature's ability to responsibly
fund state essentials such as education, transportation and
public safety."
2)Initiative Bonds . Since establishment of the initiative
process in 1911, only 17 of 331 initiatives have proposed the
issuance of general obligation bonds, however, 12 of the 17
measures have been proposed just in the last 20 years. Nine
of the 17 bond measures were approved by voters. Six of the
initiatives proposed bonds exceeding $1 billion, of which four
measures, totaling $13.8 billion, were approved. These four
measures were: (a) 1990-Rail Transportation ($2 billion); (b)
2002-Water ($3.4 billion); (c) 2004-Stem Cell Research ($3
billion); and (d) 2006-Water and Parks ($5.4 billion).
3)Related Legislation . ACA 5 (Calderon), pending in Assembly
Elections, requires initiative bond measures to be approved by
66% of voters in order to take effect.
SCA 14 (Ducheny), pending in Senate Appropriations, requires all
state initiative measures that would result in a net increase
in state or local government costs to identify a funding
source.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081