California Proposition 2 Saddles Californians With $17.5 BILLION Dollars Of More Debt.  

$17.5 BILLION dollars of more debt is this type of uncontrolled spending that is leading to inflation. California is in massive debt. We’re spending $5 billion a year on illegal immigrants’ healthcare. Now, special interests are demanding we borrow another $10 billion to subsidize construction projects that will benefit them. The Legislative Analyst’s Office pegs Prop. 2’s payback cost at $17.5 billion dollars ($500 million a year from the general fund for 35 years.)

Proposition 2 Will Cost Taxpayers Another $500 Million Per Year For 35 years.

We know where the money is coming from. Proposition 2 will cost taxpayers another $500 million per year for 35 years, money that will come out of the state’s General Fund before any current needs can be funded. This is added to the nearly $8 billion in principal and interest payments that the state is already paying annually for previous bonds.

California’s current bond debt is about $79 billion, with another $30 billion authorized but not yet issued. In March, voters approved $6.38 billion more with Proposition 1.

The $500 million per year that Proposition 2 will cost taxpayers is only the beginning. In order to receive any of the Prop. 2 bond funds from the state, local school districts must provide a “local match” of up to 50%. This generally means school districts have to put local school bonds on the ballot. If approved by 55% of voters, these bonds will add new, extra charges to property tax bills. The borrowed money is paid back by raising property taxes.

Higher property taxes raise the cost of housing and the cost of living, and not only for homeowners. Tenants will see higher rents and consumers will see higher prices as property owners deal with higher operating costs due to property tax increases.

Tax hikes are one more burden on struggling Californians, on top of higher electricity bills, higher insurance costs and higher grocery bills. That’s another reason we must look very closely at proposals for new debt to see if the money will be well spent.

Prop. 2 Saddles Future Generations with Debt that Our Kids Will Be Paying Off for Decades

The Howard Jarvis Taxpayers Association points out that bonds are borrowed money that must be paid back, plus interest, even if that means cutting vital programs to do it. Governor Newsom recently declared a budget emergency because California spends more than it takes in. Children in school today will be drowning in new debt for decades if Prop. 2 passes.

Politicians want to borrow $10 billion from Wall Street and make Californians pay it back with interest, forcing taxpayers to pay up to $10 billion for debt service payments.

Sacramento politicians overspend, issue bonds, and punish us with tax hikes on our cars, gasoline, and income. And those tax dollars rarely go where politicians say they will— our roads crumble while billions go to High-Speed Rail.

Proposition 2 does little or nothing to ensure that high priorities such as student safety are really funded this time, or if we’ll just go deeper into debt and then hear the same story about leaky roofs and asbestos next time.

How Much Districts Get Is Based On How Much They Can Raise Through Local Bond Measures.

Critics find fault with the measure because it would do little to resolve what they say are existing inequities baked into the way the state doles out school facilities funds.

How much districts get is based on how much they can raise on their own through local bond measures — so the system sends more money per student to wealthier school districts with more assessed property value and less to poorer ones. Critics say it’s especially unfair to rural districts, which tend to have less property value and more trouble passing their own bonds.

State Has Issued Tens Of Billions of Dollars In School Bonds Since 1998.

That’s a glaring problem that could have been avoided if Sacramento took its time vetting and developing Proposition 2. The state has issued tens of billions of dollars in school bonds since 1998, supplementing far more from local districts. If schools are still struggling with black mold, leaky roofs and swiftly repairing HVAC systems, there’s clearly been a failure of prioritization and leadership.

…. Proposition 2 would put California $10 billion deeper into debt without reforming its broken system of funding school facilities.

Consider that proponents of Proposition 2 say the state must borrow billions of dollars for “urgent repairs to leaky roofs” and “deteriorating gas, electrical, and sewer lines.” The money is needed, they say, to remove “hazardous mold, asbestos, and lead paint from our schools.”

Since 1998, California voters have approved $54 billion in bonds for K-12 facilities. Most recently, Proposition 51 in 2016 provided for $9 billion, and some of those funds have not yet been spent.

If there is still asbestos and lead in our schools, and if basic safety concerns have not been prioritized, where is the accountability for those failures? Are taxpayers supposed to continue to approve endless borrowing while the most critical needs of students are ignored? Where is all the money going?

Bonds Are Effectively A Tax Hike On The Public.

Debt is not the only way to build or upgrade schools. In the 2022-23 budget, the legislature appropriated more than $4 billion for new construction and modernization of school facilities.

Not long ago, California had a $100 billion budget surplus. Everything in Proposition 2 could have been paid for without incurring 35 years of interest charges, if the legislature had chosen to prioritize the safety and well-being of students.

While Proposition 2 commits billions of dollars from future state budgets for school facilities, enrollment is declining in California. According to the Department of Finance, K-12 enrollment was 6.2 million in 2016, down to 5.85 million in 2022-23 and projected to be 5.19 million by 2032. Community colleges, which would receive $1.5 billion from Proposition 2 bonds, also have seen enrollment drop.

Bonds are a credit line for the government, allowing them to borrow money for projects that the public has to pay back — with interest. This means bonds are effectively a tax hike on the public.

CA To Take On $100 Billion In Debt While Still Leaving Current Pensions Obligations Severely Underfunded.

Carl DeMaio, chairman of the tax-fighting group Reform California and a candidate for State Assembly, says that the idea of a bond is not inherently bad unless it results in wasteful or unnecessary spending.

“Prop 2 is a costly and unfair burden on working families — the spending is unnecessary, and facilities could be improved with existing funds if the government managed its budget better than a drunken sailor,” explained DeMaio.

DeMaio points to California politicians’ current budget plans, which aim to take on $100 billion in debt to pay for new programs — such as the Prop 2 bond — while still leaving current obligations like pensions severely underfunded. This would increase the state’s debt service ratio from 2.8% to 3.2% — and likely mean more tax hikes on the public to help pay down the debt.

Even worse, as DeMaio points out, is that the state does not accurately track and audit its spending. In fact, California authorized over $30 billion in spending to address homelessness — including over $6 billion in funding passed by Prop 1 in the March 2024 Primary Election — and the state has had to admit it doesn’t know how that money has been spent. Democrat Governor Gavin Newsom even vetoed a bill that would have required him to better monitor the distribution of funds.

“Zero accountability for spending — and no results!” said DeMaio. “If the state continues to fail to manage its budget and deliver on what they promise, then why should we authorize more spending?”