BILL ANALYSIS
ACA 3
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ASSEMBLY THIRD READING
ACA 3 (Blakeslee and Krekorian)
As Amended June 16, 2009
2/3 vote
ELECTIONS 7-0 APPROPRIATIONS 17-0
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|Ayes:|Fong, Niello, Bill |Ayes:|De Leon, Conway, Ammiano, |
| |Berryhill, Coto, Mendoza, | | |
| |Saldana, Swanson | |Charles Calderon, Coto, |
| | | |Davis, |
| | | |Fuentes, Hall, Harkey, |
| | | |Miller, |
| | | |Nielsen, John A. Perez, |
| | | |Skinner, |
| | | |Solorio, Audra |
| | | |Strickland, Torlakson, |
| | | |Hill |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Requires an initiative measure that would authorize
the issuance of state general obligation (GO) bonds of $1
billion or more to identify a funding source. Specifically,
this measure :
1)Prohibits an initiative measure that would authorize the
issuance of state GO bonds in a total amount exceeding $1
billion from being submitted to the electors or having any
effect unless the measure expressly provides for either
additional tax or fee revenues, the elimination of one or more
existing programs, or both, as necessary to fully fund the
repayment of bonds, as determined by the Legislative Analyst.
2)Requires the revenue source or programs eliminated to pay for
an initiative measure that authorizes the issuance of state GO
bonds exceeding $1 billion, as required by this constitutional
amendment, to be clearly identified in the title and summary
of the measure prepared by the Attorney General (AG).
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
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1)One-time General Fund (GF) 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
GO bonds proposed through initiatives and subsequently
approved by voters, there would be reduced GF costs for debt
service payments.
3)Except for Proposition 98 payments to fund K-14 education,
debt service payments for GO bonds are otherwise the state's
highest priority for GF expenditures. Rising debt payments
can therefore implicitly "crowd out" funding for other GF
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 GF programs to be
reduced to offset the debt service payments, unless the bonds
were proposed to be funded with an additional tax or fee.
COMMENTS : 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. ACA 3 requires that, in order to qualify for the
ballot through the signature process, any proposed ballot
initiative that includes authorization of a general obligation
bond measure in excess of $1 billion must include a clearly
defined new revenue source either in the forms of a new tax/fee
or the reduction or elimination of an existing program(s) of a
comparable cost. This new revenue source must be identified in
the title and summary prepared by the Attorney General. . . . As
we work to address our state's budget crisis, California cannot
afford an initiative system that allows wealthy special
interests to supplant the Legislature's budgetary authority and
put their interest ahead of California's hardworking taxpayers."
Since the creation of California's initiative process in 1911,
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just 17 of the 331 initiative measures that have appeared on the
statewide ballot have proposed to issue state GO bonds, about
5%. Of those 17 initiatives, nine have been approved-a success
rate of slightly more than 50%. Six of the 17 initiative bond
measures have been for amounts of more than $1 billion, and four
of those six were approved by voters. By comparison, about
one-third of statewide initiative measures that have appeared on
the ballot have been approved by voters.
The requirement to identify a funding source for an initiative
measure pursuant to this constitutional amendment would apply to
initiative bond measures only; there would be no similar
requirement to identify a funding source for costly initiative
measures that were not bond measures. The reason for this
distinction is unclear. Initiative bond measures make up a
relatively small portion of spending on initiative measures that
have been enacted by the voters. Although a comprehensive
accounting of the amount of money that is spent annually to
implement initiatives that were approved by the voters is not
available, the amount of annual spending required by initiative
measures that were not bond measures clearly dwarfs the amount
of spending required by initiative bond measures. In fact, the
spending required by Proposition 49 for after school programs
will exceed $540 million in the 2009-10 fiscal year - more than
the debt service for all of the initiative bond measures in the
fiscal year.
Given these facts, it is unclear whether it is desirable to
require proponents of an initiative bond measure to identify a
funding source for the initiative without also imposing a
similar requirement on the proponents of all initiative
measures.
SCA 14 (Ducheny), pending in the Senate, would require all state
initiative measures that are not bond measures and that would
result in a net increase in state or local government costs to
identify a funding source.
As a constitutional amendment, this measure requires the
approval of the voters to take effect.
Please see the policy committee analysis for a full discussion
of this constitutional amendment.
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Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094
FN: 0002573