If approved by a majority of the voters, Proposition 53, the Stop Blank Checks Initiative, “all revenue bonds issued or sold by the State in an amount singly or in the aggregate over $2 billion for any single project owned, operated, or managed by the State must first be approved by the voters at a statewide election.”
This measure, another well-conceived effort to increase transparency into how the State spends our money, deserves our support, a YES vote, much like Proposition 54, the California Transparency Act that prohibits the Legislature from passing any bill unless it has been publicized on the internet for at least 72 hours before the vote.
Unfortunately, revenue bonds do not need our approval because the source of repayment is based on the income stream of the particular project. Investment decisions are made by bureaucrats and politicians whose management capabilities, judgment and motivations may be questionable. Nevertheless, we end up paying, whether through the $6 tolls on the $6.4 billion San Francisco Bay Bridge or the ever increasing Sewer Service Charge on our DWP bill.
Revenue bonds are not backed by the “full faith and credit” of the State of California. However, if a bond goes into default, bond buyers believe the State has a “moral obligation” to make good on the bonds. Otherwise, the credit rating agencies will lower the State’s credit rating and bond buyers will put the State in the “penalty box,” resulting in higher interest rates because of the increase in perceived risk and the lack of moral fiber.
The Stop Blank Checks Initiative is aimed at two of Governor Brown’s pet projects, the $15 billion Twin Tunnels that will divert water from the Sacramento River to Southern California and the $68 billion High Speed Railway.
The shenanigans involving the not so High Speed Railway are reason enough for voters to say YES on the Stop Blank Checks Initiative.
In 2008, only 52.7% of California voters approved the issuance of $9.95 billion of General Obligation Bonds (Proposition 1A) to support the construction of the High Speed Rail system. We were told that the system would cost $33 billion, that the trip from Los Angeles to San Francisco would only take 2 hours and 40 minutes, that the system would not need any operating subsidies, and that the financing would be in place before ground was broken.
But now the system is expected to cost $68 billion (and that is if we are lucky), that the trip may take up to 4 hours, that operating subsidies will be required even though fares are more than doubled, and the financing has not been arranged. Governor Brown has even raided the Cap & Trade Fund, eliminating projects that provide significantly greater environmental benefits than High Speed Rail.
And this does not include the substantial costs of repaying the principal and interest on any General Obligation Bonds.
The Twin Tunnels are an integral part of the project now known as the California WaterFix. This $15 billion (again, if we are lucky) endeavor would divert water from the Sacramento River underneath the Bay Delta through two 35 mile tunnels to the California Aqueduct which would then transport the water to Southern California. It would also provide significant environmental benefits by restoring 30,000 to 40,000 acres of habitat in the Bay Delta.
The opposition to the Stop Blank Checks consists of politicians, labor unions, and business organizations who claim that the Initiative will take away local control and delay or derail improvements to local infrastructure. But this is the same cabal that supported the 2008 bond measure and who have much to gain by feasting on projects funded by revenue bonds that have not been approved by the voters.
But the Initiative does not apply to cities, counties, school districts, community colleges, and the University of California, despite hysterical claims to the contrary, or to projects that are less than $2 billion.
While the opposition is well funded by politicians and their cronies, the Initiative has considerable support by those who believe in transparency, disclosure, and the right to vote on deals involving billions of our money. And with the support of the opponents of the High Speed Rail, of which there are many, and the Twin Tunnels, of which many are Northern Californians who do not want to share their water with us, the odds of the Stop Blank Checks Initiative being approved are very high.
Vote YES on Prop 53, Stop Blank Checks, and send a loud and clear message to Sacramento that transparency, disclosure, and our right to vote trump their self-interests and those of their campaign funding cronies.
Cross-posted at CityWatchLA.