BILL ANALYSIS
ACA 5
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ASSEMBLY THIRD READING
ACA 5 (Charles Calderon)
As Amended July 14, 2009
2/3 vote
ELECTIONS 6-0 APPROPRIATIONS 12-4
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|Ayes:|Adams, Bill Berryhill, |Ayes:|De Leon, Ammiano, Charles |
| |Coto, Mendoza, Saldana, | |Calderon, Coto, Davis, |
| |Swanson | |Fuentes, Hall, |
| | | |John A. Perez, Skinner, |
| | | |Solorio, Torlakson, Hill |
| | | | |
|-----+--------------------------+-----+---------------------------|
| | |Nays:|Conway, Miller, Nielsen, |
| | | |Audra Strickland |
| | | | |
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SUMMARY : Requires an initiative measure that would authorize
the issuance of state general obligation (GO) bonds to be
approved by at least 55% of the voters who vote on the measure.
EXISTING LAW requires any ballot measure that appears on the
statewide ballot to receive a majority of the votes cast on the
measure in order to be approved.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
1)One-time General Fund (GF) costs of about $220,000 to include
the analysis of this measure and the arguments for and against
the measure in the statewide voter information guide.
2)Annual GF savings in reduced bond debt payments-likely in the
tens of millions of dollars-to the extent initiative bond
measures fail due to the higher threshold for voter-approval.
COMMENTS : According to the author, "ACA 5 is a measure that
seeks to reform the initiative process in California as it
pertains to the issuance of statewide [GO] bonds that qualify
for the ballot via signatures. The measure increases the
threshold for voter approval for these signature generated bond
initiatives to 55% . . .
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"There are two ways to issue statewide [GO] bonds in California:
"1) A bond measure is approved by a 2/3 vote of both legislative
houses (subject to the legislative process) and then goes to the
ballot where it is subject to a vote of the electorate, with a
simple majority vote necessary for approval.
"2) A bond petition may be circulated by voters to qualify a
measure for the ballot, where it then appears at the next
election for approval by a simple majority.
"The first method is the most common. It subjects the measure
to legislative vetting and providing a constitutional check
before it appears on the ballot. The second method, while not
as common, lacks the fiscal and legislative oversight that is
necessary when considering measures that leave the state
responsible for long term debt. When a bond is considered by
the Legislature, the long term costs and benefits are carefully
weighed as they must make considerations on the long term debt
service that goes with issuing the state's debt. This simply
does not occur when a bond qualifies via signatures.
Additionally, it takes away discretion from the legislature by
adding unanticipated fiscal pressure that accompanies this
un-vetted debt.
"While there is no doubt that these bonds help to fund important
projects, there is a question as to whether voters realize the
full fiscal impact of approving these bonds. As the state faces
almost yearly fiscal crisis, the legislature is left to deal
with the consequences of the voters' decisions at the ballot
box. It is akin to a college student running up the tab on
their parents' credit card, knowing that ultimately they are not
responsible for having to pay down the debt. Adding the 55%
threshold to these types of measures would have the same effect
as the 2/3 vote of the legislature for these measures- it
emphasizes the gravity of incurring such large amounts of long
term debt."
Since the creation of California's initiative process in 1911,
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
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rate of slightly more than 50%. Seven of the nine measures that
were approved received 55% of the vote or more. By comparison,
about one-third of statewide initiative measures that have
appeared on the ballot have been approved by voters.
The 55% vote requirement for initiative bond measures that is
proposed by this constitutional amendment applies to initiative
bond measures only; there would be no similar supermajority vote
requirement 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 a supermajority vote to approve initiative bond measures
without also imposing a similar requirement on the proponents of
all initiative measures.
Currently, all state ballot measures require a simple majority
to be approved by the voters, regardless of the changes to state
law made by the ballot measure. If this constitutional
amendment is approved by voters, it would mark the first time
that any measure that appears on the state ballot would require
more than a simple majority to pass.
ACA 3 (Blakeslee), which is pending on the Assembly Floor, would
require initiative bond measures of $1 billion or more 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 measure.
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Analysis Prepared by : Ethan Jones / E. & R. / (916) 319-2094
FN: 0002574