Proposition 53: Revenue Bonds. Statewide Voter Approval.
Should statewide voter approval be required before any revenue bonds can be issued or sold by the state for projects where the bond amount exceeds $2 billion?
The state funds its operations and infrastructure by using annual tax revenues (“pay-as-you-go”), and by borrowing money through selling bonds to investors who, over time, are paid back with interest.
There are two main types of bonds: general obligation bonds and revenue bonds. The state repays its general obligation bonds out of the state General Fund. Revenue bonds are typically repaid using the revenue received from fees and other charges paid by the users of the projects (such as bridge tolls, rent, and utility rates). General obligation bonds require statewide voter approval before the state can issue them to pay for a project; revenue bonds, however, do not require statewide voter approval under existing state law.
Statewide voter approval would be required before revenue bonds could be issued or sold by the state for any projects costing over $2 billion. This law would apply to:
- all projects financed, owned, operated or managed by the state; and
- all projects financed, owned, operated, or managed by joint agencies formed between the state and local city or county governments, another state, or a federal government agency.
Dividing large projects into separate smaller projects in order to avoid the requirement of statewide voter approval would be prohibited.
Unknown. Financial impact on state and local governments, both short-term and over time, would depend on factors such as: which projects are affected, the outcome of a statewide vote, and whether alternative projects or activities are implemented instead that could result in higher or lower costs compared to the original project.