BILL ANALYSIS �
SENATE COMMITTEE ON ELECTIONS
AND CONSTITUTIONAL AMENDMENTS
Senator Lou Correa, Chair
BILL NO: AB 732 HEARING DATE:6/21/11
AUTHOR: BUCHANAN ANALYSIS BY:Frances Tibon
Estoista
AMENDED: 5/10/11
FISCAL: YES
SUBJECT
Bond measures: ballot pamphlet: Legislative Analyst: table
DESCRIPTION
Existing law establishes a process for the Attorney General
(AG) to prepare a title and summary for each state measure.
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.
Existing law 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.
Existing law 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:
1.Upon the top portion of the first page, and not exceeding
one-third of the page, shall appear:
a) Identification of the measure by number and
title; and,
b) The official summary prepared by the AG.
c) The total number of votes cast for and against
the measure in both the State Senate and Assembly,
if the measure was passed by the Legislature.
1.Beginning at the top of the right page, the analysis
prepared by the Legislative Analyst.
2.Arguments for and against the measure.
This bill requires the summary prepared by the 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.
This bill provides that the space used for the explanatory
table in the title and summary prepared by the AG not be
included when measuring the amount of space provided for
the summary, thus keeping summary information within the
one-third of the page restriction.
BACKGROUND
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.
COMMENTS
1. 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.
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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 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
AB 732 (BUCHANAN) Page
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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 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
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required by this bill would be beneficial for all
statewide measures with a fiscal impact, rather than
focusing on bond measures only.
4. Related and Previous 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 1021 is
also on today's agenda.
PRIOR ACTION
Assembly Elections and Redistricting Committee: 7-0
Assembly Appropriations Committee: 17-0
Assembly Floor: 75-0
POSITIONS
Sponsor: Author
Support: CalTax
Little Hoover Commission
State Controller
Oppose: None received
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