California Proposition 83, Bonds for Water Projects (1988)
Proposition 83 authorized a bond issue of $65 million to provide funds for water pollution control and water reclamation projects and makes changes in the Water Conservation and Water Quality Bond Law of 1986 relating to loans and the Clean Water Bond Law of 1984 relating to accounts, funding for specified purposes, loans, and compliance with federal requirements.
In 1996, voters approved Proposition 204, which required that the repayment of loans funded under Proposition 83 be used to provide additional loans and grants for local water recycling projects.
Text of measure
The ballot title was:
The official summary said:
- "This act provides for a bond issue of sixty-five million dollars ($65,000,000) to provide funds for water pollution control and water reclamation projects and makes changes in the Water Conservation and Water Quality Bond Law of 1986 relating to loans and the Clean Water Bond Law of 1984 relating to accounts, funding for specified purposes, loans, and compliance with federal requirements."
- See also: Fiscal impact statement
The fiscal estimate provided by the California Legislative Analyst's Office said:
- Net Cost of Paying Off the Bonds. The bonds authorized by this measure probably would be paid off over a period of about 20 years, and would be a responsibility of the state's General Fund. The total cost of the bonds would be about $120 million, consisting of $65 million for principal and $55 million for interest.
- However, because the loans would be repaid (with a subsidized rate of interest), the net state cost would be about $82 million, or an average of about $4 million per year. (The net state cost would consist of $68 million for the bonds used for grants, bond guarantees, and administrative costs, and about $14 million for the interest rate subsidy on the loans.)
- This estimate assumes that all of the bonds would be sold at an average interest rate of 7.5 percent, and both the bonds and the loans would be paid off over the same 20-year period.
- 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 interest under other bond programs. These costs cannot be estimated.
- 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 other taxable investments, the state would collect less tax. This loss of revenue cannot be estimated.
Path to the ballot
The California State Legislature voted to put Proposition 83 on the ballot via Senate Bill 997 (Statutes of 1988, Ch. 47).
|Votes in legislature to refer to ballot|
- PDF of the November 8, 1988 ballot proposition voter guide
- California Law Library, November 8, 1988 ballot propositions
- Hastings California I&R database
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