This fall, voters will decide whether California should authorize a $10 billion bond to help the state respond to climate change. To read a commentary with the opposing position, click here. To read our editorial on Proposition 4, click here.
Imagine using your credit card to buy something, knowing that by the time you finish paying off the debt, you’ll have spent nearly double the original price due to interest. It’s a poor financial decision most of us would avoid.
Yet this is precisely what Democrats in the state legislature are asking California taxpayers to do with Proposition 4: add $10 billion in bond debt — with billions more in interest — to pay for ambiguous, short-term, so-called “climate” programs.
Let’s be clear about what bonds are: This isn’t free money. They’re Wall Street loans with high interest rates. The real winners with bonds are wealthy investors, and the losers, of course, are taxpayers.
In February, California already had $79 billion in bond debt. Earlier this year, Proposition 1 added another $6.4 billion. Now, we’re being asked to shoulder another $10 billion, plus interest, this time for supposed climate programs that are vaguely defined and, in some cases, dubiously labeled.
Guess who’s paying for it all? You, the taxpayer.
What’s most concerning is that many items in Prop. 4 don’t even meet the basic definition of infrastructure. Bonds should be reserved for projects that offer lasting value, such as roads, bridges or water storage, that will still be useful decades from now, long after the 40-year bond payments have been made.
Instead, Prop. 4 will spend millions on so-called “infrastructure” for farmers’ markets — things like pop-up tents, restrooms and hand-washing stations. It will also fund “workforce development” to help “mitigate unemployment,” which of course, is completely unrelated to infrastructure and climate. To top it off, the bond also includes grants for exhibit galleries at zoos and museums, and even vanpool vehicles for low-income workers.
Does that sound like climate-related infrastructure?
While these programs may be worth pursuing, they shouldn’t be funded with long-term debt. Again, bonds should only be used for long-term investments, not temporary programs that will be gone before the debt is paid off.
In 2014, California voters passed a bond measure that would provide billions of dollars specifically for water storage projects. Nearly a decade has passed, and despite all that funding, not a single drop of water has been stored. The promises made to voters have gone unfulfilled, leaving many to wonder why Democrat politicians are asking for even more funding now with Prop. 4. If they can’t deliver on their commitments from a decade ago, why should taxpayers believe that another loan will result in anything meaningful?
Before approving more borrowed money, voters deserve to see results from previous investments.
Bonds come with long-term financial burdens that eventually can cut into essential public services. Gov. Gavin Newsom has already declared a budget emergency due to the state’s spending outpacing revenue. California also faces a $56 billion deficit, and the addition of Prop. 4’s bond debt would only worsen the situation.
What’s even more frustrating is that just two years ago, California had a nearly $100 billion budget surplus. Had these climate projects truly been a priority, the state could have used a mere 10% of that surplus to fund all the programs in this bond. Instead, due to poor financial management, voters are now being asked to approve borrowing money — with interest — when these programs could have been funded with cash in hand.
Recklessly borrowing money for pet projects is not just fiscally irresponsible; it’s a disservice to California’s taxpayers. With upwards of $20 billion of debt being added to our state’s “credit card,” voters should ask why critical services, like safe drinking water and wildfire prevention, are not already a priority in the state’s General Fund budget.
What’s in the budget that takes precedence over these essential needs?
Before expecting Californians to sign off on billions in new debt, which will ultimately come at the expense of future generations, Democrat politicians need to answer for their failures on previous bonds and why they can’t pay for these supposed essential services through the existing budget.
Sen. Brian Jones, a Republican, is the state Legislature’s minority leader and represents the 40th District. He wrote this commentary for CalMatters.
