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Jon Coupal- Columnist

Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association -- California's largest taxpayer organization with offices in Los Angeles and Sacramento. [go to website] [go to Coupal index]

No on Prop. 61
We're already swimming in debt...

[Jon Coupal] 10/30/04

Every man, woman and child in California will face a future of debt and drain unlike any we have ever seen if we continue to support fiscally irresponsible bond proposals. We simply cannot afford to pile billions in debt on a state budget that is already structurally unbalanced.

According to Standard & Poor's credit-rating firm, California has $35.5 billion in unissued debt, and more is on the way. Although the state's "credit card" is maxed out, already under consideration is a $10 billion high-speed rail bond proposition expected to be on the 2006 ballot, in addition to the many other spending initiatives. California's Legislative Analyst Office has reported that the state faces billion-dollar budget deficits in 2005, 2006 and 2007.

The problem, of course, is that many of these bond proposals have very sympathetic titles. This could not be truer than with Proposition 61. How can someone possibly be against "Children's Hospital Projects" - the official title of that measure? Californians need to understand that a vote against Prop. 61 is not a vote against such programs but, rather, a vote for better uses of existing resources.

Voters also need to understand that only 20 percent of the bond proceeds will go to public hospitals, while 80 percent go to private (albeit nonprofit) facilities. Furthermore, more than half of the taxpayer dollars to repay the indebtedness goes to interest according to the fiscal analysis prepared by the California Legislative Analyst's Office.

The Howard Jarvis Taxpayers Association is also concerned with the manner in which this proposal appears on the ballot. It was sponsored by the potential beneficiaries (the hospitals) who, according to the California secretary of state, have contributed more than $5.5 million -- about $723, 000 of which was paid to a signature-gathering firm to place the measure on the ballot. These interested groups stand to score a lottery-type payoff for their campaign contributions. More than $5 million is not a huge investment when the potential payoff is $750 million. We truly wonder about a proposal whose financial backing comes -- not from patient groups -- but from those in the business of building and operating children's hospitals.

Again, as with all bonds, the principal and interest associated with Prop. 61 will be repaid from the state general fund. The state is mandated to pay bondholders before spending money on anything else. This means that there is less money available for schools, roads, law enforcement and health care. So every time we pass a bond, the result is that other vital programs receive less.

Those promoting these bonds will argue that they are for a worthy cause and we should ignore any other considerations. But reasonable people can come up with hundreds, even thousands, of "worthy" causes. Although each of these causes may be meritorious, it does not change the fact that California is already saddled with a dangerously high level of debt. Has anyone forgotten that just last March, we passed a $15 billion bond to pay off excessive spending obligations embraced by the Davis administration?

Just as with their personal budgets, voters and taxpayers must not allow themselves to become slaves to expanding debt. Anyone who has ever been in debt knows that getting out requires discipline. This means saying "no" when tempted to spend more than we have. This means saying "no" to Prop. 61. CRO

copyright 2004 Howard Jarvis Taxpayers association


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