California November 2018 Ballot - Propositions 1 and 2
Proposition 1 is a bond measure. The proponents want to issue $4 billion in general obligation bonds for housing pograms. A laudable goal, that ignores several realities.
As reported by Bloomberg, this past March the state sold $2.1 billion in bonds. That left over $31 billion in unsold bonds, $17 billion of which have been approved by the voters in the last four years. It is wise to refrain from issuing bonds until the funds are actually needed to fulfill the projects they are supposed to pay for, limiting the cost of servicing debt.
But there is already $83 billion in outstanding bonds at present. The state's credit rating with S&P Global Ratings is AA-. That's only the fourth highest rating, and if much more in bond debt is issued, the rating will go lower.
Then there is the $136 billion or so in unfunded CALPERS liabilities to worry about. In a state where the top 10% of the state's earners pay 80% of all state income taxes collected, our ability to remain solvent is too reliant on too small a population segment to engage in more borrowing unless absolutely necessary.
There are other solutions to our housing crisis than this bond measure, which will cost too much on a per-person-assisted basis.
I'm voting No on Prop 1.
* * *
Proposition 2 is being sold as a "fix" to allow the spending of revenues generated by 2004's Proposition 63 surtax on incomes above $1 million each year; for the purpose of housing the mentally ill. That proposition's goal was to raise funds to combat mental illness.
Helping the homeless is tough. Helping the mentally ill is tough. Helping those who are both mentally ill and on the streets is much more difficult. That is not open to debate. What is open to debate is what this proposition would actually do to address these concerns.
The devil is in the details. Prop 2 wants to divert $140 million in funding currently budgeted for program services to help the mentally ill through county programs and use it to fund $2 billion more in bonds. Over the 40 year life of those funds, that means we will spend $3.6 billion to get that $2 billion in funding, at the cost of reducing spending on those actually suffering from mental illness.
A large chunk of that money will go to developers to construct this housing.
Then there is the fact that all of the editorials in support of Prop 2 have ignored; the text of AB 727 that already allows counties to spend some of their budgets for mental health treatment on housing. See the excerpt below:
I am voting No on Proposition 2.
As reported by Bloomberg, this past March the state sold $2.1 billion in bonds. That left over $31 billion in unsold bonds, $17 billion of which have been approved by the voters in the last four years. It is wise to refrain from issuing bonds until the funds are actually needed to fulfill the projects they are supposed to pay for, limiting the cost of servicing debt.
But there is already $83 billion in outstanding bonds at present. The state's credit rating with S&P Global Ratings is AA-. That's only the fourth highest rating, and if much more in bond debt is issued, the rating will go lower.
Then there is the $136 billion or so in unfunded CALPERS liabilities to worry about. In a state where the top 10% of the state's earners pay 80% of all state income taxes collected, our ability to remain solvent is too reliant on too small a population segment to engage in more borrowing unless absolutely necessary.
There are other solutions to our housing crisis than this bond measure, which will cost too much on a per-person-assisted basis.
I'm voting No on Prop 1.
* * *
Proposition 2 is being sold as a "fix" to allow the spending of revenues generated by 2004's Proposition 63 surtax on incomes above $1 million each year; for the purpose of housing the mentally ill. That proposition's goal was to raise funds to combat mental illness.
Helping the homeless is tough. Helping the mentally ill is tough. Helping those who are both mentally ill and on the streets is much more difficult. That is not open to debate. What is open to debate is what this proposition would actually do to address these concerns.
The devil is in the details. Prop 2 wants to divert $140 million in funding currently budgeted for program services to help the mentally ill through county programs and use it to fund $2 billion more in bonds. Over the 40 year life of those funds, that means we will spend $3.6 billion to get that $2 billion in funding, at the cost of reducing spending on those actually suffering from mental illness.
A large chunk of that money will go to developers to construct this housing.
Then there is the fact that all of the editorials in support of Prop 2 have ignored; the text of AB 727 that already allows counties to spend some of their budgets for mental health treatment on housing. See the excerpt below:
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1.
Section 5892 of the Welfare and Institutions Code is amended to read:5892.
(a) In order to promote efficient implementation of this act, the county shall use funds distributed from the Mental Health Services Fund as follows:
(1) In 2005–06, 2006–07, and in 2007–08, 10 percent shall be placed in a trust fund to be expended for education and training programs pursuant to Part 3.1.
(2) In 2005–06, 2006–07, and in 2007–08, 10 percent for capital facilities and technological needs distributed to counties in accordance with a formula developed in consultation with the County Behavioral Health Directors Association of California to implement plans developed pursuant to Section 5847.
(3) Twenty percent of funds distributed to the counties pursuant to subdivision (c) of Section 5891 shall be used for prevention and early intervention programs in accordance with Part 3.6 (commencing with Section 5840) of this division.
(4) The expenditure for prevention and early intervention may be increased in any county in which the department determines that the increase will decrease the need and cost for additional services to severely mentally ill persons in that county by an amount at least commensurate with the proposed increase.
(5) The balance of funds shall be distributed to county mental health programs for services to persons with severe mental illnesses pursuant to Part 4 (commencing with Section 5850) for the children’s system of care and Part 3 (commencing with Section 5800) for the adult and older adult system of care. These services may include housing assistance, as defined in Section 5892.5, to the target population specified in Section 5600.3.
posted by me at 7:33 PM
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