California Proposition 107, Housing and Homeless Bond Act (1990)
Proposition 107 was for a bond issue of $150 million for housing.
The ballot summary said, "This act provides for a bond issue of one hundred fifty million dollars ($150,000,000) to provide funds for a housing program that includes: (1) emergency shelters and transitional housing for homeless families and individuals, (2) new rental housing for families and individuals including rental housing which meets the special needs of the elderly, disabled, and farmworkers, (3) rehabilitation and preservation of older homes and rental housing, and (4) home purchase assistance for first-time homebuyers."
The fiscal estimate provided by the California Legislative Analyst's Office said:
- Direct Cost of Paying Off the Bonds. The state would receive loan repayments under the three loan programs discussed above. These repayments, however, would be used for additional loans, not for repayment of the general obligation bonds. As a result, the state's General Fund would be responsible for the bond principal and interest payments, which typically would be paid off over a period of about 20 years.
- Generally, the interest on bonds issued by the state is exempt from both federal and state income taxes. . However, most of the programs covered by this measure are not eligible for the federal (but they are eligible for the state) income tax exemption on the interest income. . As a result, the average interest rate on these bonds will be higher than on other state bonds. If the authorized bonds are sold at an average interest rate of about 9 percent, the cost would be about $295 million to pay off both the principal ($150 million) and interest ($145 million). The average payment would be about $15 million each year.
Path to the ballot
The California State Legislature voted to put Proposition 107 on the ballot in Senate Bill 1693 (Statutes of 1988, Ch. 48).