October 6, 2006


In this week’s edition we will take a look at Proposition 1A through 1E and try to provide a succinct and clear picture of these propositions and our recommendations. There are 13 statewide propositions and 19 local propositions on this year’s ballot. I guess we could call this the year of the Proposition. If these five propositions, 1A-1E, pass they will total a whopping $37.3 billion dollars in bonds.

Proposition 1A: Transportation Funding Protection
Legislative Constitutional Amendment - Majority Approval Required

Should the California Constitution be amended to further protect the state sales tax revenues for transportation purposes from general-purpose use and require any funds borrowed to be repaid to the transportation fund?

In 2002 Prop. 42 was passed, that tightened the reins on the use of gasoline sales tax. Prior to 2002 most of the state sales tax on gasoline was spent on everything but the intended purpose of transportation. Prop. 42 stopped this practice except in the case of a state fiscal emergency. Proposition 1A is intended to close this loop hole and ensure that all monies are spent on transportation, infrastructure, roads, new highways. Prop. 42 allows for a suspension of this fund transfer to the State General Fund twice in ten consecutive years, and that the transfer of funds are considered as a loan that must be paid back with interest.

There are two taxes on gasoline that are used for transportation purposes. The aforementioned state sales tax and the gasoline tax. The gasoline tax which provides $3.4 billion per year has been used solely for transportation purposes. The state sales tax which in the past had been spent on everything but transportation purposes comes to about $2 billion per year.

Prop. 42 closed the loop on the $2 billion going into the general fund, with the exception of when the state faces a fiscal emergency. The State of California, it seems is in a state of constant fiscal emergency crisis. The problem is that State Legislatures are always looking for loop holes to fix their problems instead of to the right thing in establishing a responsible budget. One of the States biggest needs is highway improvement (as reflected in Prop 1B below) so lets use the money that is intended for transportation needs and then we won’t need extra bonds such as 1B.

Vote YES on Prop. 1A

Proposition 1B: Highway Safety, Traffic Reduction, Air Quality, and Port Security
Legislative Bond Act - Majority Approval Required

Should the state sell $19.9 billion in general obligation bonds to fund state and local transportation improvement projects to relieve congestion, improve movement of goods, improve air quality, and enhance safety and security of the transportation system?

This bond is a cornucopia of projects from everything from reducing congestion on state highways freeways (they don’t say how they will do this) to reducing emissions from goods movement activities (whatever that means) and a whole bunch of other stuff in between. This bond is a catch all to fulfill every road builders dream, with no specific plan or targeted end results, just a bunch of grand ideas. Let’s send this bond away and have them come back with a specific plan and goal, something tangible where we can determine whether or not the money will be spent for what it was designed to do.

Vote NO on Prop. 1D

Proposition 1C: Housing and Emergency Shelter Trust Fund Act of 2006
Legislative Bond Act - Majority Approval Required

Should the state sell $2.9 billion in general obligation bonds to fund housing for lower-income residents and development in urban areas near public transportation?

Low-income housing, first-time homebuyer assistance, and housing for farm workers are all worthy goals and what Prop. 1C proposes to target. But as with most bonds, this bond leaves enough wiggle room and enough vague language that it leaves us with questions as to whether or not these monies will be used as intended. Despite our misgiving on this bond, the need for low-income housing is needed in our cities. The opportunity is so great for the Hispanic community to become homeowners, and so is the need for housing for those who work our fields, who are now living in canyons, that we support this bond to create change for those who most need it. Our government is supposed to help those who need the help the most and this bond is a step in that direction.

We Support a YES Vote for Prop. 1C.

Proposition 1D: Kindergarten-University Public Education Facilities
Legislative Bond Act - Majority Approval Required

Should the state sell $10.4 billion in general obligation bonds to fund repairs and upgrades of public schools, including kindergarten through grade 12, community colleges, and state universities?

This bond is a double whammy. This $10 billion dollar bond is only part of the equation. School districts must match the funding provided by the state to qualify for the funds, which means that each school district that wants state monies must first pass their own local bond measure. So, we will be paying for two bonds. My problem with this bond is that I look around in San Diego County and all I see is school construction going on. Sweetwater passed their bond recently, as have San Ysidro, San Diego City Schools, Grossmont/Cuyamaca College, and Southwestern College. Do we really need another bond while all these districts are still in the midst of building from the last bonds that were passed? We don’t need to make school construction a perpetual project.

We Recommend a NO Vote on Prop. 1D.

Proposition 1E: Disaster Preparedness and Flood Prevention
Legislative Bond Act - Majority Approval Required

Should the state sell $4.1 billion in general obligation bonds to finance disaster preparedness and flood prevention projects at the state and local levels?

Ever since hurricane Katrina, flood prevention and repairing the levees in the Sacramento/Stockton Delta area has been a primary goal of the Governor. But before we go out and spend $4.1 billion dollars let us make sure that we need to do this. And let us not get the Delta confused with New Orleans. New Orleans is a city that was built below sea level, so when the levees broke there, the ocean was filling into a low lying area. The Delta is nothing like this and hence the danger that a broke levee in Northern California does not translate into the disaster that we saw last year.

Other than trying to capitalize on the Katrina disaster, there has been no out cry for levee repairs. So we find it kind of ingenious that now this issue has become a priority. And lastly, this last peccadillo has nothing to do with the levees, but whenever the discussion of sharing the water from Northern California with the drought ridden areas of Southern California, there is always some excuse or reason why this can not be done. There is neither the will nor the money to transfer water from the North to the South. So, the moral of this story is that if Northern California wants Southern Californians to share in the cost of fixing their Delta, then they are going to have to share their water resources with us.

Till then we Recommend a NO vote on Prop. 1E.

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