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Contributors
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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