Ballot Bonds
A virtual alphabet soup of special interests predictably has lined up to support $42.6 billion worth of bonds on the November ballot.
City and county officials, transportation agencies, housing advocates, environmentalists, school districts and dozens of other groups all are pushing for the bonds because they will get billions of dollars from taxpayers for their preferred programs after failing to get them funded through the state budget process in Sacramento.
Some of the programs in the bond propositions might be justified on their own merits,if they were squeezed into the state budget. But long-term bond financing, the most expensive way to fund projects (costing taxpayers nearly $2 for every $1 they approve) should not be used to pay for current spending or ongoing programs.
We get into trouble when we start borrowing to spend beyond our means.
And that’s what California is doing. Though advertised as infrastructure bonds to rebuild the state, much of the proposed bond money is slated for current, ongoing operating expenses for programs. These programs should be funded by the general fund, the state’s equivalent of a monthly paycheck, just like how typical families pay for basic expenses, and not with the credit cards.
The transportation bond, Proposition 1B would cost California taxpayers $19.9 billion. The state undoubtedly needs more roads, but most of the bond money is earmarked for ongoing maintenance, transit funding, retrofitting buses, improving security on transit systems, and other non-infrastructure expenses. Thirty years from we’ll still be paying these bills,and our kids will be paying them,but we won’t have new roads to show for them because the money was spent to repair potholes.
Likewise, Proposition 1C will cost taxpayers over $2.9 billion to fund various housing programs. But many of the programs would not build or add housing. Instead they would fund planning initiatives, acquisition of land for parks, stop-gap funding for water and sewer programs and direct subsidies to homebuyers.
Affordable housing is reaching crisis levels for millions of struggling families in urban areas across the state. And California desperately needs to invest in new roads, bridges and levees. But there are right ways and wrong ways to achieve goals. Violating basic principles of public finance and pushing the state and its taxpayers toward bankruptcy is not one of the right ways.
Samuel Staley
Director of urban growth, land use policy
Reason Foundation
