The wealthy Stockton farmer who is bankrolling Prop. 53 on the November ballot would have us believe his “No Blank Checks Initiative” is all about stopping legislators and government officials from driving up the state’s debt.
In reality, it is his ploy to stop the construction of a state public works project that he opposes: the construction of water diversion tunnels through the Sacramento-San Joaquin Delta.
Farmer Dean Cortopassi has long objected to Gov. Jerry Brown’s plan to shore up the Delta’s fragile sloughs, protect wildlife habitat and deliver water south to irrigate Central Valley farmland and quench the thirst of Southern California.
While Cortopassi may have legitimate concerns about the proposed tunnels in the Delta plan, his ploy to block their construction could inflict long-lasting harm on California’s ability to maintain and improve its vital infrastructure – including its highways, bridges, etc.
It could sidetrack much needed projects with expensive, time-consuming court and ballot-box battles. In the end, it also could make projects far more costly.
Cortopassi and his wife, Joan, spent $4 million to qualify Prop. 53 for the November ballot. Basically, the initiative will require a statewide vote before “revenue bonds” can be used to finance a state building project if the bond amount exceeds $2 billion.
Californians seldom buy their homes with cash. They obtain some kind of financing – usually long-term mortgages – and then make monthly payments. People “take on debt.”
In a similar way, state funding for infrastructure projects is obtained through basically two methods: general obligation bonds and revenue bonds.
The state repays general obligation bonds using the state’s general fund (sales and income tax dollars). As a result, the issuance of general obligation bonds requires voter approval. Voters will see some of these types of bonds on the November ballot.
On the other hand, revenue bonds are repaid by users in the form of fees. For example, the revenue bond that pays for a toll bridge to be built will be repaid by those who use the bridge. As a result, revenue bonds do not require voter approval.
While there is no mention in Prop. 53 of Brown’s $17 billion “Delta fix,” or California High Speed Rail, which Cortopassi also opposes, both projects could be delayed and likely derailed if Prop. 53 passes.
How will projects be affected?
• Unless the Legislature deems it worthy of a special election, bond elections can be held only every two years. Good luck finding money to pay for new infrastructure improvement projects in between elections.
• The initiative does not define what types of “projects” will require voter approval.
• This lack of clarity will likely provoke years of expensive, time-consuming litigation.
• More expensive financing strategies may be used to avoid election delays. This might mean large, efficient “projects” will be constructed in more expensive, piecemeal increments, although the Legislature could also choose less expensive financing options, such as borrowing against lower-interest general obligation bonds.
Prop. 53 is opposed by a wide range of groups, some of whom rarely agree. Initiative opponents range from labor unions to the California Chamber of Commerce. Officials in cities and counties also have said they fear they will lose state funding for projects, which will force local taxpayers to pick up the tab.
California taxpayers should be concerned about an increasing state debt. But Prop. 53 is clearly not about controlling debt. It is about stopping California’s progress.