Proposition 53, titled the “No Blank Checks Initiative,” springs from a wealthy Stockton-area agri-businessman’s crusade to affect two major projects that appear to impact his area, his land and his business concerns.
The projects, one to build two tunnels around the Sacramento-San Joaquin Delta to divert water to Southern California, and the other, the high-speed bullet train, are expensive — both are projected to cost billions of dollars before they are finished.
Stockton-area farmer and food processor Dean Cotapassi and wife Joan have raised more than $4.5 million to fund signature gathering and advertising for the ballot initiative. They are the only donors in support of the proposition.
Prop 53 proposes to require statewide voter approval for any project exceeding $2 billion that is funded through state-revenue bond sales.
Under current law, the state borrows money through general-obligation and revenue bonds. The state repays general-obligation bonds through the state General Fund, using state income and sales taxes, primarily. The state repays revenue bonds from fees or other charges paid by the users of the project.
Current law requires voter approval before the state can use general-obligation bonds to pay for a project. State-revenue bonds do not need voter approval under existing state law.
Prop 53 would change current law and require statewide voter approval if revenue bonds are sold by the state, by certain associations created by the state or in which the state is a member; are sold for a project that is funded, owned, operated or managed by the state; and total project cost exceeds $2 billion.
A statewide vote is not required for bonds sold by cities, counties, schools, community college districts and special districts. The proposed legislation prohibits separating a project into component parts to take cost-per-component part below $2 billion and thereby avoid a statewide vote. And the $2 billion project threshold would be adjusted each year for inflation. The measure, if passed, also would apply retroactively to projects currently funded with remaining bond amounts that exceed $2 billion. Although the Legislative Analyst’s Office (LAO) notes that at present there are not many projects that cross the $2 billion threshold, that statistic could change in the future. “It is possible other large projects could be affected in the future, such as new bridges, dams and highway toll roads,” wrote the LAO. Also, in the initiative, “project” is undefined leading to possible confusion about what could be called a project if the legislation passes. For example, a project could be defined as a single building (a hospital), or multiple buildings (a medical center), raising the price tag and likelihood of requiring statewide voter approval.
The LAO also could not project the financial impact of Prop 53, noting, “Fiscal impact on state and local governments is unknown and would depend on which projects are affected by the measure, whether they are approved by voters, and whether any alternative projects or activities [are] implemented by government.”
Said Cotapassi in 2008 when he first began opposing the water tunnels, “I have served as a catalyst to get this thing where it should be in the public eye. I will fight to the death to protect the Delta because I love it.”
And however laudable Cotapassi’s love of the San Joaquin Delta and his drive to ensure its interests, the potential consequences to local projects throughout the state have united a wide constituency of groups to oppose Proposition 53. Disparate organizations across the political spectrum oppose the prospective legislation’s requirement of statewide voter approval for projects that are geographically local with primarily local benefit.
Opponents include Gov. Jerry Brown, the California Chamber of Commerce, the State Building and Construction Trades Council, Association of California Water Agencies, League of California Cities, California Professional Firefighters and the California State Sheriffs’ Association. They note the proposition would negatively affect local control and community infrastructure improvements, water supply and drought preparedness, and inhibit California’s ability to repair outdated infrastructure. Opponents also state the measure does not contain an exemption for emergencies and natural disasters.
Proponents claim the measure would stop politicians and local agencies from borrowing billions of dollars in state revenue bond debt without getting voter approval, while holding project proponents accountable for providing accurate cost estimates and updates. They state the purpose of the initiative is to “bring the state’s public debt crisis under control by giving the voters a say in all major state bond-funded projects that will be paid off through special revenue streams or higher taxes, fees, rates, tolls or rents collected from Californians, their children and future generations.”
The San Jose Mercury News, although no supporter of the Brown’s water tunnel project, notes the proposition is so badly drafted and vague as to warrant a “no” vote. “Voters shouldn’t lock into law any proposition leaving this much uncertainty, especially since it would require two-thirds approval to change or overturn it, even though it can pass initially with a simple majority,” according to the SJMN.
For more on Proposition 53, visit www.lao.ca.gov/ballotanalysis/propositions.