PROP 3 – Vote NO
Background:
There are four general obligation bond measures on the November 5th ballot, totaling $16.8 billion in new authorizations. Bond financing is a type of long-term borrowing that the state uses to raise money for various purposes. The state obtains this money by selling bonds to investors. In exchange, it agrees to repay this money, with interest, according to a specified schedule. Generally, the total cost over the life of a bond issuance is about twice the authorized amount since interest must be paid in addition to the principle. Note also that for each bond measure approved, a portion of the state’s annual revenues must be set aside for debt-service payments on the bonds and therefore are not available for other state programs. This means that in order to pay for any bond measure approved, the legislature would either have to raise taxes or cut expenses elsewhere in the budget.
This Proposal:
This bond measure is called the CHILDREN’S HOSPITAL BOND ACT. It provides for a bond issue of $980 million to fund the construction, expansion, remodeling, renovation, furnishing and equipping of children’s hospitals.. The total cost of approving this bond measure would be about $2 billion to pay off both principal ($980 million) and interest ($933 million). Proposition 61, which voters approved at the November 2004 statewide general election, has authorized the sale of $750 million in general obligation bonds to provide funding for children’s hospitals. As of June 1, 2008, about $403 million of the funds from Proposition 61 had been awarded to eligible hospitals. This means that there are still untapped funds from that bond issue yet to be used.
Recommendation:
My recommendation is to vote no. The State of California is currently facing a huge budget crisis and in order not to run out of money is being forced to offer for sale billions of dollars of new general obligation bonds. There has also been speculation that the State may have to borrow billions of additional dollars from the Federal Government in order to remain solvent. Incurring any additional debt for anything but the most essential infrastructure is unwise and irresponsible. In addition, since an almost identical bond measure was approved by voters just four years ago and about half that money remains unspent, this new bond initiative is unnecessary. Furthermore, the institutions which will receive these funds are not impoverished. Several are part of the well-funded University of California system, and the others have substantial private and foundation support. Finally, whenever anyone uses “the children” as an issue, I become highly suspect. This is no exception. There is no indication that children’s hospitals suffer from a critical lack of funding. Singling these institutions out to receive special funding seems unfair at a time when many other institutions will be denied funding for their needs.
For more information: Voter Information Guide – Prop 3
|
If you enjoyed this article, please share it with others by clicking on the Facebook “Like” button above or one or more of the icons below. If you wish to be notified each time I put up a new post, you can subscribe through one of the links to the right. (If you don’t know what RSS is, just choose the email option.) Finally, leave some feedback or join the discussion by commenting below. I’d love to know what you think. |
Related posts:
by David Boaz or 
by David Bergland, both excellent books on libertarian thought.
sending...
