Executive Summary
California needs to invest in infrastructure, but the five bond initiatives on the November ballot would authorize $42.65 billion in new debt, with annual debt service payments of $2.8 billion, and a total cost to taxpayers of approximately $84 billion, while delivering a lot of pork and little new infrastructure.
The state budget is once again in the red as spending growth outstrips even our healthy revenue growth. At the same time the state is already sitting on a record-breaking mountain of debt that is making borrowing money more expensive and raising debt payment amounts to levels far beyond what is fiscally responsible. The vast new debt we will vote on in November would create tremendous pressure for new taxes. There is no sign that the state’s leaders will reverse course and begin managing spending as debt payments rise.
Forty-five years ago nearly 60 percent of the budget for capital projects came from general and special funds. Currently, almost all state capital improvements are financed with debt. We do not have to put up with this trend. Californians need to take a hard look at the details of the bond proposals provided here before they vote, and consider the many and realistic alternative means of meeting our infrastructure needs.