California Proposition 75, Bonds for Public Schools (June 1988)
Proposition 75 authorized $800 million in general obligation bonds to provide funds for the construction and improvement of public schools.
Text of measure
The ballot title was:
The official summary said:
- "This act provides for a bond issue of eight hundred million dollars ($800,000,000) to provide capital outlay for construction or improvement of public schools."
- See also: Fiscal impact statement
The fiscal estimate provided by the California Legislative Analyst's Office said:
A. Fiscal Effect if Approved by the Voters.
- Direct Costs of Paying Off the Bonds. For these types of bonds, the state typically would make principal and interest payments from the state's General Fund over a period of up to 20 years. Assuming all of the bonds are sold at an interest rate of 7.5 percent, the cost would be about $1.4 billion to pay off both the principal ($800 million) and interest (about $630 million). The average payment for principal and interest would be about $70 million per year.
- Borrowing Costs for Other Bonds. By increasing the amount which the state borrows, this measure may cause the state and local governments to pay more under other bond programs. These costs cannot be estimated.
- Impact on State Revenues. The people who buy these bonds are not required to pay state income tax on the interest they earn. Therefore, if California taxpayers buy these bonds instead of making taxable investments, the state would collect less taxes. This loss of revenue cannot be estimated.
B. Fiscal Effect if Not Approved by the Voters.
- Local Matching Contribution Would Be Eliminated. If this measure is not approved by the voters, existing law provides for termination of the requirement that matching contributions be made by school districts participating in the State School Building Lease-Purchase Program. The loss of local matching funds would result in either (1) fewer schools being constructed under this program, or (2) potential, unknown additional state cost to the program to pay the entire amount of any school facility it finances.
Path to the ballot
The California State Legislature voted to put Proposition 75 on the ballot in Assembly Bill 48 (Statutes of 1988, Ch. 25).
|Votes in legislature to refer to ballot|
- PDF of the June 7, 1988 ballot proposition voter guide
- California Law Library, June 7, 1988 ballot propositions
- Hastings California I&R database