League of Women Voters – PROPOSITiON 46
These PROS & CONS are researched and developed by the League of Women Voters of California Education. They are an unbiased presentation of the measures on the Nov. 5, 2002 California Primary Election ballot.
The League does not judge the merits of the arguments or guarantee their validity. Arguments come from many sources and are not limited to those found in the state ballot pamphlet.
League of Women Voters of California is a nonpartisan organization committed to informed and active citizen participation in government. All citizens, men and women, of voting age are welcome to join. The League has two roles: citizen education and advocacy. Our election services are carried out by the League of Women Voters of California Education Fund and exclude all advocacy.
ACT OF 2002
Legislative Bond Act
Should the state create a trust fund by selling two billion one hundred million dollars ($2,100,000,000) in general obligation bonds to fund 21 types of housing programs, including multifamily, individual and farmworker housing?
Most of the houses and apartments built in California each year are built with private dollars, but some receive federal, state, and local government subsidies. For some of the units receiving state funds, the state provides lowinterest loans or grants, typically with the requirement that the housing be sold or rented to low income Californians. Other state programs provide homebuyers with direct financial assistance to help with a down payment. State funding for housing programs has varied considerably over time. In 1988 and 1990, voters approved a total of $600 million in general obligation bonds to fund state housing programs, all of which has been spent. Now the state typically spends less than $20 million annually in General Fund revenues on state housing programs except for a recent one-time allocation of $350 million.
Proposition 46 allows the state to sell $2.1 billion of general obligation bonds to fund 21 types of housing programs.
— Multifamily Housing Programs ($1.11 billion): housing programs aimed at the construction of rental housing projects with priority going to projects in already developed areas and near existing public services.
— Homeownership Programs ($405 million): lowinterest loans or grants to encourage home ownership for low- and moderate-income homebuyers.
— Farmworker Housing ($200 million): loans and grants to the developers of both rental and owner-occupied housing for farm workers.
— Other Programs ($385 million): construction of homeless shelters, payments to cities and counties based on their approval of housing units, mortgage insurance for high-risk homebuyers, and capital needs of local code enforcement departments.
Most program funds probably would be allocated over a three- to five-year period. The Legislature would have broad authority to make future changes to the measure’s programs. The State Auditor would perform periodic audits of the administering agencies and the recipients.
If the bonds were sold at the current rate for this type of bond and repaid over 30 years, the cost would be about $4.7 billion to pay off both the principal and interest. The average payment would be about $157 million per year.
A YES VOTE means the state will sell $2.1 billion in bonds that will create a trust fund to provide affordable housing opportunities.
A NO VOTE means the state will not sell $2.1 billion in bonds to assist residents with affordable housing needs.
— Provides affordable housing for working people, accessibility improvements to apartments for disabled, and loan assistance for military veterans, teachers, police and firefighters.
— Will be paid out of existing state resources without raising taxes.
— Adds to the state’s debts at a time when California is already on the brink of bankruptcy.
— Will not reduce red tape that homebuilders go through.
For more information:
Supporters: Housing California, (916) 447-0531, http://www.yeson46.com
Opponents: Sen. Ray Haynes, (916) 445-9781
League of Women Voters
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