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For Jay Obernolte, the issue was simple enough: on their ballots, California voters already see the fiscal impact of proposed tax increases. So they should see the same for bond measures.
But the Republican assemblyman’s bill that this year extended the disclosure requirements to bond requests has spurred schools to rise in opposition. They say the language — which lists the debt’s annual cost and impact on tax rates — is creating confusion and are pushing for an exemption for borrowing measures until July 2020. The Democratic-controlled legislature may vote on such a step as soon as this month so local governments don’t have to list the information for November bond measures.
Obernolte said he’s hoping for a compromise that avoids carving out an exception for bond proposals. Otherwise, “it sets a terrible precedent for taxpayers that we’re willing to impose taxes on them without being transparent with them about the fact that they’re voting on a tax increase,” he said.
It’s high stakes for those at the whim of the California voter, who twice a year is faced with a multiple-page ballot on political and fiscal issues. Already in November, voters will decide whether to split the state into three and to borrow $8.9 billion for water and parks projects — and that’s just a couple of the state measures. Because of higher turnout, counties, cities and school districts tend to submit dozens more bond measures for approval in general elections than they do in primaries.
Given that the ballot statement is limited to just 75 words, it’s inaccurate and misleading to shoehorn in an estimate on the bond costs, said Dennis Meyers, assistant executive director of government relations at the California School Boards Association. Debt is often sold in series over time and subject to fluctuating interest and tax rates and valuations can also change, he said.
"For us, we’re pulling our hair out to say ok, how do we meet the intent of what the author is after with bonds, which are so market driven?" Meyers said about the law. "Confused voters tend to vote no."
The association said that the voter guides that counties provide — which can easily run more than 100 pages — should be the place to more fully explain the bonds’ potential costs.
Here’s how one school district handled the rules that were in effect for the June 5 primary: on the ballot, San Lorenzo Unified School District asked voters if it can issue $130 million of bonds "at legal rates with citizen oversight and audits, raising an average of $8,000,000 annually for bonds while bonds remain outstanding from rates estimated at $0.06 per $100 assessed valuation, with no money used for administrative salaries?"
In the voter guide, the district added that the "best estimate" of the total debt service is about $264 million and that actual payments, tax rates and the years in which they will apply with depend on the timing of bond sales, market interest rates, and actual assessed valuations.
Voters approved the request by almost 68 percent, according to the Alameda County elections office.
The assemblyman said he wants the information on bond measures’ possible fiscal impact to remain in the ballot statement, not just in the voter guide. He said that before, districts spent much of the word limit touting the projects the debt would fund, and nothing about the costs.
“I want to make sure people are making an informed choice," Obernolte said.