There are three bond measures on the November 2002 ballot, and some people
have questioned both the fiscal and political wisdom of putting them before
voters at a time of financial uncertainty. The LWVC Board has concluded
that all three represent attempts to address important long-term needs
for California that cannot be put off. Even with an uncertain job market,
California's population continues to grow, and it is expected to double
within the next 30 to 40 years. Our infrastructure is simply not adequate
to accommodate even our current needs, let alone increases of that magnitude.
Opponents will cry that we are in financial trouble and cannot afford
these measures. Some advocate reliance on a pay-as-you-go approach to
meet our needs, but spreading payment out over a long period, through
good times and bad, is the traditional way to meet major infrastructure
costs. This is no different than the decision individuals make to buy
their own homes, as many continue to do even now when the economy if faltering,
because they know it is the only way to achieve their long-term goals.
This is also a good time to borrow money. Interest rates are at historically
low levels, and concerns about the stock market are leading many people
to turn to fixed-return investments such as bonds. Although the interest
payments come out of the General Fund annually, bonds are sold in issues
of different size at various times, so that the state Treasurer has the
ability to manage bond issuance to take advantage of market conditions
and keep repayment costs at a prudent level. According to the Legislative
Analyst, if all the bonds on this ballot were to pass and be sold, the
debt service ratio would rise to 4.9 percent in 2004-05 and then decline.
That is below what the ratio was when it peaked at slightly more than
5 percent in the early 1990s. The State Treasurer believes this is an
acceptable rate. Spending from the bond measures can also be beneficial
to the economy, especially in job creation.
Since 1990, California has failed to make adequate long-term infrastructure
investments in a number of areas. The bond measures on this ballot provide
a means to address the compelling needs our state faces.
