BILL ANALYSIS �
AB 732
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Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON ELECTIONS AND REDISTRICTING
Paul Fong, Chair
AB 732 (Buchanan) - As Amended: April 26, 2011
SUBJECT : Bond measures: ballot pamphlet: Legislative Analyst:
table.
SUMMARY : Requires the summary prepared by the Attorney General
(AG) for state bond measures that are submitted to the voters
for their approval or rejection to include an explanatory table
summarizing the Legislative Analyst's estimate of the net state
and local government fiscal impact.
EXISTING LAW :
1)Establishes a process for the AG to prepare a title and
summary for each measure submitted to the voters of the whole
state. Requires the ballot title and summary to include a
summary of the Legislative Analyst's estimate of the net state
and local government fiscal impact.
2)Requires the Legislative Analyst to prepare an impartial
analysis of each proposed measure describing the measure and
including a fiscal analysis of the measure showing the amount
of any increase or decrease in revenue or cost to state or
local government. Provides that if a proposed measure is
estimated to result in increased costs to the state, the
estimate of those costs shall be set out in boldface print in
the ballot pamphlet.
3)Requires the statewide ballot pamphlet to include information,
in a specific order, for each state measure to be voted upon
including, but not limited to:
a) Upon the top portion of the first page, and not
exceeding one-third of the page, shall appear:
i) Identification of the measure by number and title;
and,
ii) The official summary prepared by the AG.
b) Beginning at the top of the right page, the analysis
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prepared by the Legislative Analyst.
c) Arguments for and against the measure.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the Bill : According to the author:
AB 732 attempts to decrease California's future debt
obligations by improving voter clarity on bond measures and
their future fiscal implications. The bill would require
the Legislative Analyst's Office to prepare a simple and
easy to understand graph, chart, or report card for each
statewide bond measure, illustrating the information
discussed in the Overview of State Bond Debt section of the
Voter Information Guide. AB 732 stems from a recommendation
from the Little Hoover Commission's 2009 report, Bond
Spending: Expanding and Enhancing Oversight.
Nearly two-thirds of California voters know very little or
nothing about how the state pays for bond measures. This
makes it very difficult for a majority of voters to know
exactly what they are authorizing at the ballot box and how
it contributes to the state's General Fund obligations.
In addition to voters' limited knowledge on bond financing,
many organizations mislead voters to think that enormous
projects won't cost taxpayers. As more general obligation
bond measures are enacted, the debt service on bonds
consumes a larger portion of the General Fund. General
obligation bond measures typically do not have a dedicated
revenue source outside the General Fund. Ads promoting the
bonds often tout that a measure can be implemented without
new taxes. While these bond measures may not specifically
require new taxes, they are not without cost. In the
current budget climate, money to pay for a bond measure may
displace money for another program that derives its funds
from the General Fund.
As our state's deficit continues to grow and the
Legislature is being forced to cut funding to school
districts and public safety organizations, Californians
must do something to control future debt obligations. In
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2007, the Legislative Analyst's Office reported that
General Fund debt payments for already authorized general
obligation and lease-revenue bonds for
infrastructure-related purposes will total about $4.7
billion in 2007-08, rising to a peak of $7.5 billion in
2014-15. Unless the state does more to educate voters on
the impacts of ballot-box budgeting, California's debt
obligations could take up an even greater portion of the
General Fund and fiscally impact the state for years to
come.
2)Little Hoover Report : In 2009, the Little Hoover Commission
(LHC) released a report entitled, "Bond Spending: Expanding
and Enhancing Oversight." In the report, the LHC made several
recommendations to the Legislature aimed at increasing the
oversight and accountability of bond measures that have
already passed, as well as increasing the clarity and
transparency for bond measures that will be proposed to voters
in the future. One of the recommendations included in the
report was for the state to establish fundamental criteria for
ballot measures and to have the criteria evaluated and
included as a simple and easy-to-understand report card in the
voter guide for all bond measures placed on the ballot. In
the discussion for this recommendation, the LHC described a
comprehensive report that reflected established standards or
fundamental criteria for bond measures. However, given that
the Legislative Analyst is required by law to be impartial in
their analysis, and that creation of a report card based on
established standards would create a new mandate on the
Legislative Analyst, this bill requires that the fiscal
summary, already required under current law, be displayed in a
table form.
3)Bond Spending Only : The requirement in this bill is only
applicable to state bond measures, and will not change the
title and summary for measures that do not include bonds.
This is likely because, as noted by the author, the bill is
based on the LHC report which focused solely on bonds. The
LHC report noted that, "As Californians cast their ballots for
bond measures, they set priorities that tie the hands of
lawmakers when it comes time to trim the budget."
However, since the implementation of the initiative process,
there have been a number of approved non-bond measures which
have required a certain portion of General Fund spending be
dedicated to a specific purpose. These measures also restrict
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the Legislature's ability to alter the relative shares of
General Fund spending provided to program areas in any given
year. For instance, Proposition 98 of 1988, provided for a
minimum level of total spending (General Fund and local
property taxes combined) on K-14 education in any given year.
Proposition 98 accounts for over 40 percent of annual state
General Fund spending. Proposition 49 of 2002, requires that
the state spend a certain amount on after-school programs,
which exceeded $540 million in the 2009-10 fiscal year.
Given that the money to repay state general obligation bonds
comes from the General Fund, this committee and the author may
wish to consider if the information required by this bill
would be beneficial for all statewide measures with a fiscal
impact, rather than focusing on bond measures only.
4)Say It Again : Current law already requires that the fiscal
impact of a proposed measure be analyzed and included in both
the circulating title and summary and in the analysis printed
in the state ballot pamphlet. In addition, existing law
requires the state ballot pamphlet, for each statewide
election at which state bond measures will be submitted to the
voters, to include a discussion prepared by the Legislative
Analyst of the state's current bonded indebtedness situation.
This bill requires, in addition to the current information
already provided, the inclusion of a table in the title and
summary to reflect the estimate of the net state and local
government fiscal impact, prepared by the Legislative Analyst.
Given that fiscal impacts are already being discussed in the
analysis of proposed measures, it is unclear whether the
additional information required by this bill would be
redundant. However, given the impacts that approved bond
measures have had on the state's general fund, and that some
voters more easily learn through pictures rather than words,
it may be beneficial to provide fiscal information to voters
in various forms to ensure clarity and comprehension.
5)Suggested Technical Amendment : Current law limits the space
provided in the ballot pamphlet for the identification of the
measure by number and title, the official summary prepared by
the AG, and the total number of votes cast on the measure, if
it passed by the Legislature, to one-third of a page. This
bill proposes to add a table to the summary prepared by the
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AG; however, it does not provide for extra space in ballot
pamphlet for such table. The committee recommends that the
bill be amended to allow for an exemption on the spacing in
the ballot pamphlet, as to not limit the contents of the
summary prepared by the AG. Such an amendment would be
similar to current provisions of law that limit the number of
words in the title and summary to 100 words, not including the
fiscal impact.
6)Political Reform Act of 1974 : California voters passed an
initiative, Proposition 9, in 1974 that created the Fair
Political Practices Commission and codified significant
restrictions and prohibitions on candidates, officeholders,
and lobbyists. That initiative is commonly known as the
Political Reform Act (PRA). Amendments to the PRA that are
not submitted to the voters must further the purposes of the
initiative and require a two-thirds vote of both houses of the
Legislature, unless the amendments are to specified provisions
to add information to the ballot pamphlet. This bill would
require additional information to be included in the ballot
pamphlet, and therefore requires a majority vote.
7)Related Legislation : AB 1021 (Gordon) requires additional
fiscal information to be included in the circulating title and
summary prepared by the AG and the summary statements prepared
by the Legislative Analyst for a proposed initiative measure.
AB 1021was approved by this committee on a 5-2 vote, and is
pending in the Assembly Appropriations Committee.
8)Previous Legislation : AB 1278 (Harkey) of 2009, would have
required the Legislative Analyst to include additional
information in the ballot pamphlet for an election for each
state initiative measure that proposed the issuance of a state
bond. The bill also would have required that the ballot labels
for state bond measures include additional information
relating to the proposed bond. AB 1278 was never heard in
committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California State Controller John Chiang
California Taxpayers Association
Little Hoover Commission
AB 732
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Opposition
None on file.
Analysis Prepared by : Maria Garcia / E. & R. / (916) 319-2094