State Bond Issues Approved Add Up to $6-Billion Debt

California voters have agreed to pay $6 billion in principal and interest over the next 20 to 30 years to resolve immediate demands for new classrooms, libraries, water systems and prison cells.

The new debt--$3.3 billion in principal and $2.7 billion in interest--will be created through the sale of general obligation bonds authorized when the voters approved nine state propositions Tuesday.

State Sen. Robert Presley (D-Riverside), chairman of the Appropriations Committee, said the easy passage of the propositions demonstrated acceptance by voters of bond issues as a method of side-stepping a 1982 initiative by tax crusader Paul Gann that placed limits on spending by state and local governments.

About the Only Way

“About the only way you can do any capital projects any more is through bonds, and that’s kind of unfortunate,” Presley said. “Of course, when you do that you’re costing the taxpayer more money.”

The generous mood that voters displayed Tuesday boosted the state’s total potential indebtedness to $12.3 billion, including outstanding bonds and those that have been authorized but remain unissued. Another $5.9 billion in bonds primarily for housing and water facilities are self-paying through mortgages and water-use fees.

Still, studies by the legislative analyst’s office show that the percentage of state expenditures that California devotes to debt service to be well below the national average.

“There is no evidence that California’s current debt burden is excessive or poses any significant fiscal threat,” the study said last year.

While warning lawmakers that bonds cannot be issued in “limitless amounts,” the study found that “there is sufficient room for the state to continue issuing bonds in the future for financing its basic long-term capital needs.”

The bond issues authorized Tuesday include:

Prisons. Two propositions by Presley allow the state to raise $1.3 billion to expand and construct jails and prisons to accommodate a growing inmate population. They authorize $817 million for state youth and adult correctional facilities and $500 million for county adult and juvenile jails.

Libraries. The only bond issue that teetered close to failure before it finally won approval permits issuance of $75 million in bonds to provide grants for the acquisition, construction or remodeling of library facilities.

Water. Three propositions authorize issuing $200 million in bonds for a variety of programs to assist local water agencies in conservation projects, to improve water supply systems and to provide grants for local governments building sewage treatment plants.

Housing. Concern for the homeless prompted a proposition that will provide $300 million in bonds to finance 8,000 low-income rental units, 22,000 rehabilitated residential hotel rooms, 33,000 emergency shelter beds, 900 units for family housing, 300 housing units for seasonal farm workers and assistance to 4,000 first-time home buyers.

Schools. Two propositions to relieve overcrowding in public schools, colleges and universities provide $600 million for construction and renovation at the University of California, California State University and community colleges and $800 million for new public school classrooms and renovations.

While applauding passage of the propositions, Presley warned that “we should start putting the brakes on it.”

“I’m going to start imploring my members that we get beyond prisons, parks and schools, that we really start taking a hard look,” he said. “If you don’t, first thing you know, this is going to be California’s national debt.”