SACRAMENTO, Calif. (AP) — California’s Legislature asked voters for help Wednesday as it grapples with a wave of billions of dollars in budget deficits.
Lawmakers voted to put two $10 billion bonds on the November ballot. If approved, the money would pay for new schools and help communities prepare for the impacts of climate change.
California was swimming in cash just a few years ago, when budget surpluses topped $100 billion during the pandemic. But the state has had to slash spending to cover deficits totaling more than $78 billion over the past two years as revenues plummeted amid rising inflation and an economic slowdown in the state’s vital technology sector.
The money from the bonds could offset some of those cuts and also fund a number of priority projects across the state in the coming years.
But the money isn’t free. The climate bond alone will cost taxpayers more than $19 billion to service, with annual payments of $650 million a year, putting even more strain on state finances.
As Gov. Gavin Newsom met with President Joe Biden and other Democratic governors in Washington, Senate President Mike McGuire signed the bills into law as acting governor, ending a raucous evening session of the Legislature that had been repeatedly disrupted by protesters against the war between Israel and Hamas.
Asking voters for permission to borrow large sums of money is always risky, especially if you do it multiple times during the same election.
In addition to the two state-level ballot measures, voters will likely have to approve hundreds of local lending proposals, including a massive $20 billion housing bond for the nine counties surrounding the San Francisco Bay Area.
Recent history shows that voters are tired of these bonds.
In 2020, despite a history of approving statewide school bonds, rejected a $15 billion education loan proposal —which would have been the largest in state history. And earlier this year, voters narrowly approved Proposition 1, which authorized the state to borrow more than $6 billion to house the homeless — a result widely seen as a warning to lawmakers considering taking on more debt.
“I thought the razor-thin margin on Proposition 1 would be a wake-up call for these ill-defined bonds,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “Whether it’s education, homelessness, climate, Californians feel like they’re not getting their money’s worth.”
Advocates say voters are smart enough to recognize the great need that will be met — most school facilities are built with a combination of state and local money. But the demand for state money is so great that there is a waiting list of projects worth more than $3 billion, according to Democratic Assemblyman Al Muratsuchi, who sits on the committee that approves the funding.
“Why do you go to the voters? You go to the voters to make investments that will move us forward that we can’t pay for with a single appropriation from the budget,” said Democratic Senator John Laird.
Much of the climate bond would be used to improve water supplies and help prepare for wildfires. Nearly 400 water systems across the state fail to meet state safety standards. Meanwhile, 15 of the 20 most destructive wildfires in state history have occurred in the past decade. Heat waves are getting longer and more intense, threatening public safety, and intense winter storms have caused damaging flooding in recent years.
“It’s something that’s more tangible for people here and more real because they’ve seen it so many times,” said Melissa Romero, deputy legislative director for California Environmental Voters, an advocacy group that supports the bond.
Negotiations on the education bond have been going on for nearly two years, and the end result has not pleased everyone. The bond money would only apply to public schools and community colleges, with the exception of the University of California and California State University systems.
In addition, some advocacy groups argue that the bond would benefit wealthier school districts at the expense of poorer districts, a problem they say is a persistent problem with the state’s program for financing the construction of school facilities.
“It would continue the status quo, with some nominal equity adjustments that won’t really address the underlying problem,” said Nicole Gon Ochi, deputy director of Public Advocates, a nonprofit law firm and advocacy group.
Muratsuchi said the bond would make it easier for districts to qualify for the state’s emergency financial aid program and would allow districts with fewer resources to go through the complex process of applying for state grants.
Concerns about the climate bond revolve around whether $10 billion is enough to make a difference and whether the money is distributed fairly across the state. Democratic Assemblywoman Jasmeet Bains was one of the few lawmakers to oppose the bond on that basis.
Democratic Assemblyman Eduardo Garcia noted that “difficult decisions had to be made” given the competing priorities for limited funding.
“We also had to consider the dynamics of what voters and members of this House would support,” he said.
