SACRAMENTO, Calif. — The California Legislature asked voters for help on Wednesday because it was facing a line of multibillion-dollar budget gaps.
It was decided that two $10 billion bonds would be on the November ballot. With this money, new schools would be built and towns would be ready for the effects of climate change.
Just a few years ago, California had a huge amount of money because its budget reserves added up to well over $100 billion during the pandemic. But the state had to cut spending to make up for more than $78 billion in deficits over the past two years. This happened because rising prices and a slowdown in the state’s important technology industry caused revenues to drop.
The bonds’ money would help make up for some of those cuts and pay for many important projects all over the state for many years to come.
The money isn’t free, though. It will cost taxpayers more than $19 billion to pay off the climate bond alone, with payments of $650 million every year. This will put even more strain on the state’s resources.
While Gov. Gavin Newsom met with President Joe Biden and other Democratic governors in Washington, D.C., Senate President Pro Tempore Mike McGuire signed the bills into law as acting governor. This ended a loud session of the Legislature in the evening that was interrupted several times by protesters against the Israel-Hamas war.
It is always risky to ask voters for permission to borrow a lot of money, but it is especially risky to do this more than once during the same election.
Besides the two statewide ballots, voters will probably also have to decide on hundreds of local borrowing plans, such as a huge $20 billion housing bond for the nine counties that surround San Francisco Bay.
Voters seem to be getting tired of these ties based on recent events.
Voters turned down a $15 billion plan to borrow money for schools in 2020, even though they had previously approved statewide school bonds. This would have been the biggest borrowing in state history. And earlier this year, voters almost didn’t pass Proposition 1, which would have let the state borrow more than $6 billion to help house the homeless. This was seen as a warning to lawmakers who were thinking about taking on more debt.
The very close vote on Proposition 1 should have been a wake-up call for these vague bonds, said Jon Coupal, head of the Howard Jarvis Taxpayers Association. “Californians think they are not getting enough for their money, whether it’s in education, housing, or the environment.”
People who support the measure say that voters are smart enough to see the big need that will be met. Most school buildings are paid for by a mix of state and local taxes. But there is so much demand for state money that Democratic Assemblymember Al Muratsuchi, who is on the group that decides who gets the money, says there is a list of projects worth more than $3 billion that need to wait.
“Why do you go to the polls?” Democratic state Sen. John Laird said, “You go to the voters to make investments that move us forward that cannot be paid for by a single budget line.”
A big part of the climate bond would be used to help get ready for wildfires and improve the water supply. About 400 water systems across the state don’t meet safety standards set by the state. Also, 15 of the 20 worst wildfires in the history of the state have happened in the last ten years. Longer and stronger heat waves are putting people’s safety at risk, and in the past few years, strong winter storms have caused damaging floods.
A group that supports the bond, California Environmental Voters, said, “It’s more real and tangible for people here because they’ve seen it so much.” Melissa Romero is the deputy legislative director for that group.
There were talks about the education bond for almost two years, and not everyone was happy with the end result. The bond money would only be used for public schools and community colleges. It would not be used by the University of California or the California State University programs.
Also, some support groups say the bond would help wealthier school districts more than poorer ones. This is something that has always been a problem with the state’s program for paying for school building projects, the groups say.
Nicole Gon Ochi, deputy managing attorney for Public Advocates, a nonprofit law company and advocacy group, said, “It would keep things the same with some small changes to equity that won’t really solve the problem.”
Muratsuchi said that the bond would make it easier for districts to get help from the state’s financial hardship program and would make it easier for districts that don’t have a lot of resources to apply for state funds.
People are mostly worried about whether or not $10 billion will be enough to change things and whether the money will be spread out fairly across the state. Because of this, Democratic Assemblymember Jasmeet Bains was one of the few members who spoke out against the bond.
Democratic Assemblymember Eduardo Garcia said that “tough choices had to be made” because of the competing needs for limited funds.
He also said, “We had to think about what voters and members of this House would support.”
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