California Proposition 53 (2016)

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Proposition 53
	Voter Approval of Revenue Bonds
	Source: California Secretary of State [1]

Last updated March 17, 2019

Proposition 53 was a California ballot proposition on the November 8, 2016 ballot. It would have required voter approval for issuing revenue bonds exceeding $2 billion.

In California, a ballot proposition can be a referendum or an initiative measure that is submitted to the electorate for a direct decision or direct vote. If passed, it can alter one or more of the articles of the Constitution of California, one or more of the 29 California Codes, or another law in the California Statutes by clarifying current or adding statute(s) or removing current statute(s).

A revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds, rather than from a tax. Unlike general obligation bonds, only the revenues specified in the legal contract between the bond holder and bond issuer are required to be used for repayment of the principal and interest of the bonds; other revenues and the general credit of the issuing agency are not so encumbered. Because the pledge of security is not as great as that of general obligation bonds, revenue bonds may carry a slightly higher interest rate than G.O. bonds; however, they are usually considered the second-most secure type of municipal bonds.

Arguments in favor of the measure stated that it would require politicians to provide estimates of how much a project would cost, as well as give voters a say before taking on large debt. The measure followed similar practice as with general obligation bonds, which currently require voter approval before the state can use them to pay for a project. Arguments against the measure stated that it would negatively impact local control over projects by allowing statewide votes on smaller community projects. Additionally, the term project was not defined and it was unclear which projects might be affected by the measure.^[2]^[3] Cities, counties, schools districts, and community college districts were specifically excluded from the measure’s definition of “state”.^[4] However, the California Legislative Analyst's Office warned that local governments sometimes partner with the state government to get lower interest rates on government bonds, which could have required statewide voter approval of local projects under the measure.^[4]

A general obligation bond is a common type of municipal bond in the United States that is secured by a state or local government's pledge to use legally available resources, including tax revenues, to repay bond holders.

The Legislative Analyst's Office (LAO), located in Sacramento, California, is a nonpartisan government agency that has provided fiscal and policy advice to the California Legislature since 1941. The office is known for analyzing the state budget with the aim of making government programs more effective and less costly.

It was unlikely that many projects would have been affected by the measure,^[3] though it could have affected large-scale projects such as California High-Speed Rail and California Water Fix and Eco Restore.^[5]

California High-Speed Rail is a high-speed rail system under construction in the U.S. state of California. It is projected to connect the Anaheim Regional Transportation Intermodal Center in Anaheim and Union Station in Downtown Los Angeles with the Salesforce Transit Center in San Francisco via the Central Valley, providing a one-seat ride between Union Station and San Francisco in 2 hours and 40 minutes. Future extensions are planned to connect to stations to San Diego County via the Inland Empire, as well as to Sacramento.

California Water Fix and Eco Restore, formerly known as the Bay Delta Conservation Plan, is a $15 billion plan proposed by Governor Jerry Brown and the California Department of Water Resources to build two large, four-story tall tunnels to carry fresh water from the Sacramento River under the Sacramento-San Joaquin Delta toward the intake stations for the State Water Project and the Central Valley Project.

Proponents spent $4.6 million fighting for the measure, all of it from California Delta farmer Dino Cortopassi and his wife.^[4] Cortopassi has been an outspoken critic of the planned Water Fix tunnels underneath the delta.^[4]

Opponents spent $10.9 million fighting against the measure, with the top donor being $4.1 million from Governor Jerry Brown’s 2014 campaign funds.^[4] Other top opposition donors included the California Democratic Party, a labor coalition, venture capitalist John Doerr, and the San Manuel Band of Mission Indians.^[4]

Edmund Gerald "Jerry" Brown Jr. is an American politician who served as the 34th and 39th Governor of California from 1975 to 1983 and from 2011 to 2019. A member of the Democratic Party, Brown served as California Attorney General from 2007 to 2011. He was both the oldest and sixth-youngest Governor of California as a consequence of the 28-year gap between his second and third terms.

The California Democratic Party is the state branch of the United States Democratic Party in the state of California. The party is headquartered in Sacramento, and is led by acting-Chair Alex Gallardo-Rooker.

L. John Doerr is an American investor and venture capitalist at Kleiner Perkins in Menlo Park, California. In February 2009, Doerr was appointed a member of the President's Economic Recovery Advisory Board to provide the President and his administration with advice and counsel in trying to fix America's economic downturn. As of July 2017, Forbes ranked Doerr as the 105th richest person in the United States and the 303rd richest person in the world, with a net worth of US$ 7.5 billion as of February 16, 2018. Doerr is the author of Measure What Matters, a book about goal-setting.

The measure was opposed by the editorial boards of the Los Angeles Times,^[6] the San Francisco Chronicle,^[7] and The Sacramento Bee.^[8] Firefighters opposed the measure, warning that there was no exemption for disaster funding.^[4] Cities and local water districts were also opposed.^[4]

The Los Angeles Times is a daily newspaper which has been published in Los Angeles, California, since 1881. It has the fourth-largest circulation among United States newspapers, and is the largest U.S. newspaper not headquartered on the East Coast. The paper is known for its coverage of issues particularly salient to the U.S. West Coast, such as immigration trends and natural disasters. It has won more than 40 Pulitzer Prizes for its coverage of these and other issues. As of June 18, 2018, ownership of the paper is controlled by Patrick Soon-Shiong, and the executive editor is Norman Pearlstine.

<i>San Francisco Chronicle</i> newspaper serving the San Francisco Bay area

The San Francisco Chronicle is a newspaper serving primarily the San Francisco Bay Area of the U.S. state of California. It was founded in 1865 as The Daily Dramatic Chronicle by teenage brothers Charles de Young and Michael H. de Young. The paper is currently owned by the Hearst Corporation, which bought it from the de Young family in 2000. It is the only major daily paper covering the city and county of San Francisco.

The Sacramento Bee is a daily newspaper published in Sacramento, California, in the United States. Since its founding in 1857, The Bee has become the largest newspaper in Sacramento, the fifth largest newspaper in California, and the 27th largest paper in the U.S. It is distributed in the upper Sacramento Valley, with a total circulation area that spans about 12,000 square miles (31,000 km²): south to Stockton, California, north to the Oregon border, east to Reno, Nevada, and west to the San Francisco Bay Area.

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References

↑ "Statement of Vote - November 8, 2016, General Election". December 16, 2016. Retrieved January 7, 2017.
↑ "California Proposition 53, Voter Approval Requirement for Revenue Bonds above $2 Billion (2016)". Ballotpedia. Retrieved 12 November 2016.
1 2 "Official Voter Information Guide" (PDF). California Secretary of State. Retrieved 25 September 2016.
1 2 3 4 5 6 7 8 Orr, Katie. "Election 2016: Proposition 64". KQED News. Retrieved 20 October 2016.
↑ Skelton, George. "Proposition 53 is a ballot measure Gov. Brown hates, but it's one voters should love". Los Angeles Times. Los Angeles Times. Retrieved 25 September 2016.
↑ The Editorial Board of the Los Angeles Times (15 September 2016). "The problem Proposition 53 aims to solve is speculative, but the damage it could inflict is very real". Los Angeles Times . Retrieved 20 October 2016.
↑ The Editorial Board of the San Francisco Chronicle (31 August 2016). "A one-man crusade isn't the way to run California's finances". San Francisco Chronicle . Retrieved 20 October 2016.
↑ The Editorial Board of the Sacramento Bee (6 September 2016). "Beware of quick fix offered by wealthy farmer's initiative". The Sacramento Bee . Retrieved 20 October 2016.

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[1] "Statement of Vote - November 8, 2016, General Election". December 16, 2016. Retrieved January 7, 2017.

[ballotpedia-2] "California Proposition 53, Voter Approval Requirement for Revenue Bonds above $2 Billion (2016)". Ballotpedia. Retrieved 12 November 2016.

[voterguide-3] 1 2 "Official Voter Information Guide" (PDF). California Secretary of State. Retrieved 25 September 2016.

[kqed-4] 1 2 3 4 5 6 7 8 Orr, Katie. "Election 2016: Proposition 64". KQED News. Retrieved 20 October 2016.

[5] Skelton, George. "Proposition 53 is a ballot measure Gov. Brown hates, but it's one voters should love". Los Angeles Times. Los Angeles Times. Retrieved 25 September 2016.

[6] The Editorial Board of the Los Angeles Times (15 September 2016). "The problem Proposition 53 aims to solve is speculative, but the damage it could inflict is very real". Los Angeles Times . Retrieved 20 October 2016.

[7] The Editorial Board of the San Francisco Chronicle (31 August 2016). "A one-man crusade isn't the way to run California's finances". San Francisco Chronicle . Retrieved 20 October 2016.

[8] The Editorial Board of the Sacramento Bee (6 September 2016). "Beware of quick fix offered by wealthy farmer's initiative". The Sacramento Bee . Retrieved 20 October 2016.