California lawmakers are fretting about the opportunity to ask voters for billions in bond dollars, leading to a potential conundrum for leaders: seek money through the ballot or distribute it in the budget?
Assembly Speaker Robert Rivas, D-Hollister, Senate President Pro Tem Mike McGuire, D-Healdsburg, and Gov. Gavin Newsom will provide an overview of the many potential bond measures lawmakers are pushing in late June.
They must also reach a budget agreement around the same time. That means some funding priorities that don’t end up on the ballot could end up in the budget, and vice versa. The state is facing an estimated $45 billion deficit, leaving leaders with tough choices.
“They are very closely linked,” Assemblywoman said Buffy WicksD-Oakland, of the budget and bond measures.
Wicks is pushing for a $10 billion housing bond, but she also welcomed a joint legislative budget deal that allocates funding for housing and homelessness programs. Newsom cut his revised spending plan.
“You want the simplest possible ballot,” she said. “You want to get as few proposals on the ballot as possible. So there is value in having the money in the budget, but still pushing for the bond. The pressure on the bond helps to create more leverage for the money in the budget.”
School and climate bonds
Lawmakers have proposed bond measures since last year to address everything from fentanyl addiction to flood protection.
The Senate and Assembly Rules committees made all bond measures two-year bills near the end of last session, pushing them back to 2024 to qualify for the November ballot. The move made possible the March vote for Newsom’s Proposition 1, which asked voters for $6.4 billion to fund mental health services.
Now leaders must choose the bonds they support before the deadline for the measures to qualify for the June 27 vote. Rivas and Newsom’s offices declined to comment on the bond negotiations. McGuire’s spokeswoman did not respond to a request for comment by deadline.
Lawmakers pushing bonds say leaders are prioritizing at least two measures: one to fund school facilities and one to pay for climate change initiatives. Investors buy government-issued bonds, which California must pay back with interest over the course of 10 to 30 years.
Assemblyman Al Muratsuchi, D-Torrance, authored Assembly Bill 247, a $14 billion bond that would pay for construction and modernization projects at preschool through community college facilities. He said last week that leaders will combine his measure with Senate Bill 28 by Sen. Steve Glazer, D-Orinda, which calls for $15 billion for similar investments and includes the campuses of the University of California and California State University.
Both the revised budget Newsom presented in May and the legislative spending plan leaders released last week included cuts to school facilities funding, pointing to a possible bond measure that could pay for these improvements.
Assemblyman Eduardo GarcíaD-Coachella said Friday that he and Assemblywoman Lori Wilson, D-Suisun City, have led an Assembly working group on school and climate bond measures. They hope to initiate conversations with the Senate about the policies and possible funding allocations the initiatives could include.
Garcia said he was working on a climate bond even before the COVID-19 pandemic. He said current conversations focus on his measure, Assembly Bill 1567, and a similar tie from Sen. Ben Allen, D-Santa Monica. Both lawmakers’ proposals would ask voters for more than $15 billion for programs related to clean energy projects, water quality and conservation, coastal conservation, wildfire prevention and more.
Lawmakers’ joint budget deal includes hundreds of millions of dollars in cuts to aquatic habitat, drought and water resilience projects, as well as a handful of other climate-related reductions. Garcia said he doesn’t think the potential bond measure played a role in these cuts, as “there were climate cuts last year and breaks the year before, so I think that’s just part of the circumstances.”
However, the representative said that the climate bond “has been a subject of discussion with a view to possible supplementation.”
“But I don’t know if it’s just, ‘Hey, we’re going to do this because we have that,’” Garcia said. “Because the deposit is not a guarantee. Voters still have to approve it.”
Housing financing
In terms of housing, Wicks is in a decent situation strategically.
The legislative budget restores funding for programs to provide loans for low-income rental construction and to finance local housing planning that Newsom eliminated from his revised spending plan. It also provides $1 billion for a new round of flexible Homeless Housing, Assistance and Prevention (HHAP) grants for local efforts to address homelessness.
The Governor and Legislature budgets both provide $500 million for low-income housing tax credits to support affordable developments.
“This would give us the opportunity to fund housing as much as possible in the current environment we’re in and vote again in two years if that’s what it takes,” Wicks said.
When asked about statements from her colleagues about leaders’ bond prioritization, Wicks said, “There’s a lot of support for housing.”
“I think it’s a question of, does this happen in the bond or in the budget?”
