No, not that Bond; I’m talking about certificates of debt. Every election cycle, the shortcomings of the state budget are dangled in front of Californians. The state legislature, as a body, cannot bring itself to bring in revenue at the rates necessary to fund the projects they want, and the executive branch cannot bring itself to manage the funds it is allocated properly, so we the people have the opportunity to force their hand.

I’m generally disinclined to vote for bonds, they are the governmental equivalent of credit card debt. This year, we get Propositions 1B, 1C, 1D, 1E, and 84 to consider. If they pass, we’re looking at 6% of the general fund, the state’s discretionary income, going to interest payments in 2010.

Prop 1B

This is simply a $19,925,000,000.00 bond measure for transportation infrastructure improvements:

(+) California has some pretty lousy roads. Fixing roads cost money. Getting more money into the road system in a politically-expedient way requires issuing a bond.

(-) This is expected to cost ~$32,000,000,000.00 to pay off. That means this is a ~$12,000,000,000.00 giveaway to folks that have money lying around somewhere. That money will have to come from somewhere, namely fees for state services, sales taxes, excise taxes, income taxes, and property taxes.

(+) Some portion of the bond revenue will be used for port security. This is, frankly, the federal government’s responsibility, but I suppose somebody will have to do it while they’re asleep at the wheel.

(-) The proposition does not earmark specifically what the money will be used for, but rather who the money will be split off to.

I’m thinking “no.” I like having roads as much as the next guy, but that’s a lot of money to sprinkle around all over the state to be eaten up by wasteful transportation contractors that can never get a job done on-time or on-budget.

1C

This is a $2,850,000,000.00 bond to subsidize the construction of low-income housing, and make available loan assistance to low-income families seeking to become homeowners and to help get people living in emergency shelters back into normal housing.

(+) California is a tremendously expensive place to live, and any help is appreciated.

(-) It is expected to cost more to pay off the interest on this bond than the original revenue generated.

I’m thinking “no.” I love poor folks and battered women as much as the next guy, but bonds should be used for investments, to build something that will be useful for the entire time the bond is being paid off (and longer) and produce a greater positive effect on the well-being of the state and its citizens than its cost. This does neither.

1D

School bonds are something a little different than other bonds. There’s a certain “think of the children” sentiment that tugs one’s heartstrings towards a “yes” vote on any ballot initiative that purports to improve the lot of our little ones. This one is $10,416,000,000.00 to abate overcrowding and renovate existing facilities.

(+) Improved education has long-lasting positive effects to the economy and society in general.

(+) I have a kid. By the time this money gets spent, he’ll be in the school system, ready to directly benefit from newer facilities or indirectly benefit as other kids end up in new classrooms instead of jammed in with him.

(-) As with any bond, there’s interest to be paid. In this case, it will cost an estimated $20,300,000,000.00 to pay this off. That’s money my son’s going to have to pay in taxes some day.

(-) Matching funds. If my local elementary school wants a new $1,000,000.00 facility, it’ll have to raise $500,000.00.

It’s a coin-toss. Of the bonds on the ballot this year, this is the one most likely to indirectly pay for itself over time. That said, Californians have passed over $28,000,000,000.00 in school bonds in the past decade for K-12 education alone. Add in the massive portion of the state budget that goes towards education, and it seems to me that taking on additional debt right now shouldn’t be necessary at all. I’m leaning towards a “no” on this one as well.

1E

This is a $4,090,000,000.00 bond for the upkeep and repair of the levee system in California’s central valley.

(+) Flood damage that could result from breached levees in the central valley could be calamitous. A great many communities have sprung up under the protection of these levees, which were originally constructed to protect agricultural assets and haven’t been faithfully maintained over the years.

(+) Some of the most economically-vital parts of the state require these levees to function properly. This includes central valley agriculture, as well as the aqueducts that feed Los Angeles.

(-) It will cost ~$8,000,000,000.00 to pay off this bond. That’s $4,100,000,000.00 in interest, more than the initial revenue generated.

(-) Most of the suburban areas threatened by decrepit levees actively fought against any efforts by regulatory agencies in California to force them to upgrade their levees before putting thousands of people into these flood plains.

Another “no” vote, I’m afraid. I see no indication that this money will actually be well-spent. A year after Hurricane Katrina, levee improvements are politically popular, but that doesn’t change the fundamentals here. We would likely be better off spending this money out of the state general fund on continuous maintenance instead.

84

This is a $5,400,000,000.00 bond intended to fund projects that safeguard or improve water quality, including flood control and natural resource protection.

(+) California was built, to a great degree, on the back of water projects. Maintaining water quality is a huge priority for the state government.

(+) There is a great deal of specificity regarding where this money is going to be spent. This appears to actually be the result of requests for funding that the legislature couldn’t scrape the money together for just yet.

(-) This appears to actually be the result of requests for funding that the legislature couldn’t scrape the money together for just yet. Passing a bond like this simply forces the state legislature to spend money that they couldn’t agree to budget properly. This will cost us ~$5,400,000,000.00 in interest payments to accomplish.

Again, a “no.” The goals here are laudable, but here we have a situation where the Assembly and the Governor wanted to reduce the state budget deficit. To do so, they failed to properly manage existing efforts to protect our resources. Proposition 84 is symptom of dysfunction in Sacramento. As with Proposition 1E, this should be part of the general fund.