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Are school bonds free? According to the standard ballot question, YES!

Sometimes we “smart guys” are not. Just because WE understand a fundamental aspect of a political issue doesn’t mean that the VOTERS know what they are voting on. Because we are so “smart,” too often we self-appointed pundits fail to emphasize to others the fact that crucial information is being hidden from voters.

Such is the case with local bond propositions — which are ALWAYS dishonestly presented. And our failure to understand and fight this misrepresentation has helped perpetuate the California “something for nothing” con job on taxpayers.

The fact is that few voters read beyond the official “ballot question” of a bond. That summary is a single LONG sentence that supposedly impartially summarizes the matter being placed before the voters. The truth is that it’s blatant propaganda written by proponents, with zero input from the opposition. County Council mindlessly accepts such “questions” unless there’s a stunning lie contained in it — which proponents are usually clever enough to avoid.

The problem is not just the obvious propaganda aspect — it’s what is always OMITTED. EVERY such summary ALWAYS leaves out a CRUCIAL point — HOW the bonds will be paid for — WHO is paying for the bonds.  As the excellent article below by my longtime taxpayer friend Joel Fox details, the government lies through omission. And it’s systemic throughout the state.

In San Diego we have eleven such bond measure on various local ballots. It’s clear that they are “cookie cutter” summaries — using the same language, and omitting the same facts.  Here’s a link to the official ballet “question” posed by each of to our 35(!) local prop ballot questions in the county — including 11 K-12 and community college bond measures.

http://www.sdvote.com/content/dam/rov/en/election/E110816_local_props_labels.pdf

At this link, one can click on a question to go to the more detailed proposition information — including the useful ballot ARGUMENTS that too few read. But almost no one does this — or even visits this page at the Registrar of Voters website.

Let’s take one bond question as an example.Remember, they ALL read the same — it appears all were written by the same hired guns promoting such bonds:

MIRACOSTA COLLEGE JOB TRAINING, COLLEGE TRANSFER, VETERAN SUPPORT MEASURE. To upgrade classrooms and career training facilities for science, healthcare, technology, advanced manufacturing, other growing local industries, provide job training/placement to Navy/ Marines/ other veterans, improve access to affordable higher education to local students, improve disabled access, repair, construct, acquire classrooms, facilities, sites/equipment, shall MiraCosta Community College District issue $455,000,000 in bonds, at legal rates, subject to local control, requiring annual audits, and independent citizen oversight?

In the ballot book, the government then distills the question down for the REALLY low information voters to grasp:

Bonds — Yes                                   Bonds — No

In other words, something for nothing. This summary omits the critical point that the measure levies HIGHER PROPERTY TAXES on all homeowners and businesses. And indeed, that fact should be the OPENING clause of the ballot question — “Should we pay higher property taxes for . . . .”

But it’s not. Instead, each bond question concludes with this meaningless clause:  . . . “shall [fill in the government agency hyping the bonds] issue $XXXXXX in bonds, at [or below] legal rates, subject to local control, requiring annual audits, and independent citizen oversight?”

Sounds great! Bonds issued for good causes — apparently without a tax increase — and the government will make sure the money is well spent (yeah, that’s been working SOOOO well up to now, right?).

In addition, let’s remember that such school bonds no longer require the 2/3 majority vote — it’s now 55%. That 2/3 threshold is designed to offset the low information voter factor — to make sure that the people paying the taxes are protected from tax increases too easily passed.

As a result (including proponent campaign spending that will be AT LEAST 100 times more than the opposition can muster), most of these bonds will pass. Many beleaguered property owners will find one or more tax increases on their property tax bill starting next year.

Contrary to popular belief, California property tax bills are FAR higher than the national average. Indeed, the median California homeowner’s bill is 93% higher than the median property tax paid by homeowners in the other 49 states.

http://linkis.com/blogspot.com/Yq6cx

With 180 or more such bond measures on local California ballots this November (and given that most will pass), our property tax bills (and resulting rents) will pull even further ahead of the national average. Oh joy!

As the article below details, this misrepresentation must end. Perhaps through legislation, perhaps through lawsuits, perhaps through public pressure, perhaps through a constitutional amendment passed via the initiative process.  But regardless, this reform should be pursued.

Henceforth no legitimate taxpayer group should EVER endorse ANY such measure that does not clearly state in the summary question that the bonds will be paid with a TAX INCREASE. Indeed, if the taxpayer organization is REALLY legit, it should automatically OPPOSE any such bond proposition using this deceitful strategy — the “neutral” option should be off the table.

Sadly, this year’s massive bond increases will escape such reform. And in this state, such reform is “iffy” for future elections, as California’s dominant public employee labor unions LOVE this stealth method of raising taxes.  While the bond money doesn’t go directly for their higher salaries and their bloated, underfunded pensions, it frees up general fund money for such spending — money is fungible.

http://www.foxandhoundsdaily.com/2016/10/are-bonds-free/

Are Bonds Free?

Editor of Fox & Hounds and President of the Small Business Action Committee

Friday, October 21st, 2016

Voters in California have hundreds of local bonds to consider in this election but I suspect many voters don’t understand how the bonds are funded. They won’t find out by reading ballot summaries.

I can’t speak for all the bond summaries throughout the state, but I looked over the 24 bonds on Los Angeles County ballots on the County’s webpage and not once did I read that the bonds are paid for by an increase in property taxes. Do you think that simple statement might change the results of bond elections?

In the private sector, the Federal Trade Commission enforces truth in advertising laws. We could use some truth in ballot information in the public sector, too.

Practically all the summaries dealing with the bonds funding homelessness issues or school repairs tell the voters that the millions of dollars in bonds would be acquired at the legal rates. The bond summaries say what the bonds will be used for. Sometimes a bond summary mentions a citizens oversight committee or periodical audits or that the money cannot be used for salaries or pensions.

The only thing the summaries do not mention is that property taxes will be raised to pay for the bonds. Kind of an important fact that’s left out for the voters who will be paying those increased taxes. Most voters don’t dive in the details of ballot measures but rely on the short summaries provided to decide how to vote.

In the speeches I’ve given this election cycle on the statewide ballot propositions, I’ve found myself explaining the difference between state general obligation bonds and how they are financed versus the revenue bond financing mechanism. This is all because of Proposition 53 on the ballot that would require a vote on revenue bonds exceeding $2 billion.

The response I get makes me feel that many voters do not have a grasp of how bonds are financed. Therefore, information about local general obligation bonds and their connection to property taxes is crucial.

The vote requirement for local bonds was placed in the 1879 rewritten state constitution. The idea of having a vote on local general obligation bonds, and a two-votes majority vote at that is because local general obligation bonds require the citizens to put up their property as collateral against the payment of the bonds. Since bonds take 30 years or sometimes more to pay off, the vote is obligating future property owners to meet the bond payment obligation. A super majority vote under these circumstances is certainly justified.

But it would help to let the voters know what they are getting into. Some voters may feel the bond is paid off with general fund revenues and that all the voters are doing is approving a shift of general funds to cover the bonds. After all, that is the way state general obligation bonds are funded – once passed by voters and issued, the state general obligation bonds have first call on the state general fund.

However, local voters are often unaware that they are authorizing a property tax increase when approving a local G.O. bond.

That should be corrected. Perhaps state legislation is necessary.

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