Pete Rates the Propositions
Sensible opinions on the California ballot propositions      since 1980      by Pete Stahl

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Pete Rates the Propositions
June 1994

Pete recommends:
1A   YES   $2 Billion for Earthquake Relief and Highway Retrofit
1B   YES   $1 Billion for School Construction
1C   YES   $900 Million for College & University Construction
175   YES   Restoration of Renters' Tax Credit
176   YES   Prohibition of Local Taxes on Nonprofit Organizations
177   NO   Reassessment Exemption for Improving Disabled Access
178   NO   Reassessment Exemption for Water Conservation on Commercial Farms
179   NO   Increasing the Sentence for Drive-by Shooting by Five Years
180   YES   $2 Billion Parks & Wildlife Pork Barrel


My Semi-Biennial Lecture on Bonds

When California wants to fmance a large project, it asks the voters for permission to take out a loan. Props 1A, 1B, 1C and 180 are just such requests. If the voters approve, the legislature may take out loans for the projects by selling general obligation bonds, which are paid back with interest over 20 or 30 years. The bond payments come out of the state's main budget, the General Fund. So when we vote on the bonds, we are really voting on whether the project in question ought to be added to the state's budget.

"Wait a minute!" I hear you cry. "What about those interest payments? Won't we end up paying more for interest than for the bonds themselves?" This used to be the case, but in the current fmancial climate each dollar of bond money will cost only nineteen cents in interest, accounting for inflation. (See page 18 of your blue ballot pamphlet for details.)

"Okay," you admit, "but loans are still more expensive than pay-as-you-go." It's true, they are. But you've got to have loans to buy a house, or a car, or anything else that you need immediately but can't pay for yet. It's worth paying the premium of interest to get the funding now.

"Well and good," you continue, "but there are six billion dollars in bonds on this ballot. Isn't that too much to borrow?" For you, yes, but the State of California can handle it Current bond payments total about 5% of the General Fund; this ballot's bonds would raise it to just 5.5%, still within reasonable limits.

Props 1A, 1B, 1C and 180 will fund only long-lived, tangible acquisitions, like parklands, school buildings and highways. It's sensible to make extended payments for items which will be used far into the future. Remember, too, that California's population continues to skyrocket at the rate of half a million people a year. Borrowing makes particular sense if you know your income will go up in the future. As the state grows and the economy recovers, the General Fund will certainly grow too.

There is one last reason to vote for a bond measure. In addition to being formal requests for permission to take out "loans," bond measures are also looked upon as referenda on the merits of the proposed projects. If a bond measure fails, legislators are likely to believe that the public feels the project is not worthy of receiving any state funding. You may have meant, "yes on the project but no on the bonds," but your message to Sacramento will read, "no on the project" So if you vote down a bond measure just because you don't like bonds, you may well have killed forever the project the bonds were to have funded.



Proposition 1A: $2 Billion for Earthquake Relief and Highway Retrofit – YES

Prop lA provides two billion dollars for recovery from the Northridge earthquake and for seismic safety throughout the state. The money is to be spent in three broad categories: California's contribution to the federal relief effort, home and apartment reconstruction, and bridge and highway retrofit.

The federal government is spending nearly ten billion dollars to help southern California recover from the January 17 quake. But there's a catch: the state must kick in about half a billion dollars of its own to be eligible for the federal relief. $475 million from Prop lA will provide the state's share for public building and infrastructure repair, hazard mitigation and repair of highway damage.

$575 million of Prop lA will be used as long-term loans to owners of houses and low-rent apartment buildings damaged in the Northridge earthquake. Since these loans are supposed to be paid back with interest, Prop l A's actual cost should be lower than the advertised $2 billion. But since the Department of Housing and Community Development may postpone repayment of these loans for up to 30 years. don't figure in the repayments quite yet

The largest part of Prop l A, $950 million, will go toward retrofitting highways and bridges throughout the state to withstand large earthquakes. This will provide the bulk of the funding for the huge highway retrofit project that came out of the 1989 Lorna Prieta quake. Lest you San Francisco Bay Area residents feel excluded by Prop lA. be aware that at least $380 million of l A's proceeds will be used to retrofit state-owned toll bridges, nearly all of which are in northern California



Proposition 1B: $1 Billion for School Construction – YES

Prop 1B will provide one billion dollars for construction and modernization of elementary, junior high and high schools. At least $600 million of this will be used to build new schools. Before the famous Prop 13 of 1978, most school districts funded their own construction. But local districts can no longer afford this, so the state has taken over. Since 1982, we voters have approved about seven billion dollars in school construction bonds. Nevertheless, over six billion dollars worth of applications for school construction and reconstruction are pending. California gains 200,000 new students each year. We need Prop IB to give them places to learn.



Proposition 1C: $900 Million for College & University Construction – YES

Prop lC will provide $900 million to the University of California. California State University, community colleges and the Maritime Academy for the purchase and improvement of land, buildings and laboratories. Before 1984 state tideland oil revenues provided about $125 million a year for college construction. But foreign oil prices have been so low that this revenue has all but disappeared. Course offerings have been reduced and tuition has risen dramatically as the colleges are forced to use their operating budgets for buildings and improvements. Passage of lC will help reverse this alarming trend and restore our public colleges to the distinguished stature they deserve.



Proposition 175: Restoration of Renters' Tax Credit – YES

In 1972 California decided it wanted to tax tourists and business travelers from out of state. So it increased the sales tax and offered compensating refunds to people who actually live here. For homeowners this refund took the form of a Homeowners' Exemption to the property tax; for renters it became the Renters' Credit on your state income tax.

When Prop 13 passed in 1978, property owners got a huge windfall as assessments were rolled back to 1974 levels. Landlords were (ahem) suPwsed to pass the savings on to their tenants. When this didn't happen (surprise!), the state compensated tenants by increasing the Renters' Credit from $37 to $60 per person. This was back in the days when the state routinely ran a budget surplus (can you imagine?) and could afford such generosity.

These days, of course, the state routinely runs gigantic budget deficits. so naturally the Renters' Credit has come under attack. In 1991 the governor and legislature denied the Credit to all but the poorest, and in 1993 they eliminated it altogether. The Renters' Credit is (ahem) suPwsed to return in 1995, but I wouldn't hold my breath, if you know what I mean. Prop 175 will bring back the Renters' Credit permanently, writing it into the state Constitution so the governor and legislature can't kill it again.

There are several plausible arguments against Prop 175, all flawed. First: "It has been sixteen years since Prop 13 passed; surely by now rents must take the tax windfall into account" On the contrary, over the years landlords have grown accustomed to charging that extra five dollars a month, knowing that the state will compensate their tenants. Do you think rents will drop if 175 fails? Give me a break. Furthermore, over hal/the Credit is intended to offset the 1972 sales tax increase, not Prop 13. So even if rents had normalized, we'd still owe renters most of the Credit.

Next: "Indubitably the Renters' Credit is a good idea But why write it into the Constitution, where nobody can touch it?" Because property owners' protection is written into the Constitution (in Prop 13). I'll be willing to drop renters' rights to the level of statute when landlords' rights do the same.

Finally: "The Renters' Credit is so small for each renter, but there are so many renters that restoring it will cost the state half a billion dollars. Is $60 per person too much to ask in these deficit-riddled times?" It's not too much if you ask it of all taxpayers. But voting down 175 makes renters into second-class citizens. Renters would have to contribute more, while property owners wouldn't. This is hardly fair. We can find more equitable solutions to our state's budget problems.



Proposition 176: Prohibition of Local Taxes on Nonprofit Organizations – YES

Prop 176 don't hardly do nuthin': Y'see, it aims to put the kibosh on some or taxes and fees that they was gonna try to collect from them thar not-for-profit groups. But the heck of it is, nobody was trvin' to collect' em! Are you with me here? Prop 176 will prevent localities from imposin' taxes or license fees on nonprofit organizations. even though no localities currently do so. Well. it caint do no one no ham, I figger. Long as we're at it, we might as well outlaw doin' hog calls while you're sittin' in a tree buck nekkid too. fer all the good it'll do.



Proposition 177: Reassessment Exemption for Improving Disabled Access – NO
Proposition 178: Reassessment Exemption for Water Conservation on Commercial Farms – NO

The famous Prop 13 of 1978 says that your property's assessed value can go up only 2% a year so long as the property isn't sold or significantly improved. So while your property may be worth twice what it was ten years ago, its assessed value will have barely changed. Since property taxes are based on assessed value instead of real value, the size of your property tax bill depends more on how 1002 you've owned your property than how much it's really worth. It's sort of like paying income tax based on bow lon2 you've had your current job instead of bow mucb money you make. It's ridiculous.

Since Prop 13 passed, we voters have approved about a zillion little exemptions to let special people avoid being reassessed when they move or remodel: disaster victims, people who inherit their property, people over 55 who move into cheaper homes, people who fire-proof or earthquake-proof their property, people who live in historic buildings. Prop 177 extends reassessment exemptions to property owners who remodel to improve access for the handicapped. And Prop 178 extends exemptions to owners of commercial farms who install water conservation equipment.

On the surface Props 178 and 179 seem reasonable, forward-thinking and innocuous. But every time we grant a reassessment exemption like 178 and 179 propose, we make the lunacy I pointed out above more palatable, and thus postpone the day when California comes to its senses and [{(peals Provosjtion 13 Props 178 and 179 hope to eliminate the complaints of two more classes of citizens upset with the system of "property tax based on length of ownership," and thus perpetuate a fundamentally flawed law.

I don't usually recommend protest votes, but I've taken up repeal of Prop 13 as a crusade. As California bousing prices recover, soon it won't be unusual for people who have just bought their property to pay ten times more property taxes than their neighbors who have owned since 1978. It's as unfair and arbitrary to base taxation on length of ownership as it would be to base it on length of hair or length of name. Props 178 and 179 will pass easily. Your "no" votes might just send a tiny message that we are unwilling to accept the inequity of Prop 13 any more.



Proposition 179: Increasing the Sentence for Drive-by Shooting by Five Years – NO

Prop 179 is blatant grandstanding by politicians in a flimsy attempt to appear "tough on crime" during an election year. It's disgusting to watch. Prop 179 asks us to increase the prison sentence for drive-by, second-degree murder from 15-years-to-life to 20-years-to-life. cyve have to vote on this because the current sentence was stipulated by Prop 7 of 1978 [the Death Penalty Initiative]; the only way to modify a Prop is with another Prop.)

Voting to increase this sentence is supposed to make us feel good. After you vote for 179 you can say, “There! Take that, you hideous drive-by shooters! I've just pounded another nail in your coffins, you sleazy, slimy pieces of filth! Don't mess with me, or I'll put you away for a looooong time! Ha ha ha ha ha ha ha ha!!!”

How pathetic we have become. Is this how to fight crime? What difference will those paltry five years make to the fourteen-year-old triggerman cruising the 'hood in someone's car? Precious little, I'm afraid. Even in the unlikely event he's aware of Prop 179's larger sentence, he still knows that (1) it's shoot or be shot-that's life in the gangs, (2) chances are he won't get caught, (3) he can probably avoid being tried as an adult, (4) if that doesn't work, he'll plea-bargain to a lesser charge, and (5) he'll be released early due to prison overcrowding anyway. If you think Prop 179 will prevent any crimes, you're dreaming.

No, Prop 179 is not about fighting crime; it's about getting reelected. Governor Wilson and two legislators are handing you this chance to feel good about yourself, and they aren't bashful about taking credit for it. I'm not partisan on this—I opposed Democrat Leo McCarthy’s anti-drug Prop 133 in 1990 on similar grounds. It's simply bad manners to incite the electorate on some meaningless issue to prove one's toughness.

Go ahead and vote for Prop 179 if it makes you feel good; I suppose it can't do much harm. But be aware that you're being manipulated, and that 179 won't reduce crime one iota. If the return of executions hasn't reduced murders, five measly years sure won't either.



Proposition 180: $2 Billion Parks & Wildlife Pork Barrel – YES

Prop 180 will authorize about two billion dollars in bonds for the acquisition. restoration. conservation and/or development of parks. historic sites, and wildlife refuges throughout California Prop 180 specifies sites and amounts for literally hundreds of projects. from the acquisition of wild land on the North Coast to protect it from off-road vehicles ($40,000) to the establishment of a Museum of Latino History ($10 million). There's $10,000 for fences around the burrowing owl habitat near Lake Isabella. and $1.5 million for expanding the Lower San Jacinto Valley Vernal Pool and Rare Plant Reserve. There's $15 million to remodel Hollywood Bowl, and $500,000 for a preschool playground in San Francisco's Tenderloin District Prop 180 does so much it takes nineteen pages of fine print in your ballot pamphlet to describe it all. For such an environment-minded measure, 180 sure has killed a lot of trees.

Be that as it may, Prop 180 deserves your vote. The traditionalists among you should support 180 because California has used bonds to fund parks and wildlife projects since 1928. The capitalists among you should support 180 because it gives the tourism industry a shot in the arm with its aid for such attractions as the Railroad Museum in Sacramento, Venice Beach in Los Angeles, and the California Academy of Sciences in San Francisco. Social progressives should be pleased that 180 allocates over $30 million to the restoration of urban parks made unusable by gang-related activity. And of course environmentalists should support 180 because the bulk of its funds will be used to remove fragile habitats from the hands of potential developers, preserving our state's unique and varied ecosystems for generations to come.



 
 
 
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