California Proposition 1, New Prison Construction Bond Act (June 1982)

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California Proposition 1, or the New Prison Construction Bond Act of 1981, was on the June 8, 1982 statewide primary ballot in California as a legislatively-referred bond act, where it was approved.

Proposition 1 authorized the State of California to issue and sell $495 million in state general obligation bonds to finance the construction, renovation, remodeling and deferred maintenance of state prison facilities.

Under Proposition 1, decisions about specific allocations of funding for prison construction were left to the Governor of California and the California State Legislature. It was expected that Proposition 1 would provide partial funding for an additional 10,000 permanent beds and 1,850 temporary beds for the prison system.

In 1982, California's prison system consisted of 12 prisons and a number of camps and community prerelease centers. Prior to Proposition 1's passage, the prison system had a capacity of 24,600 inmates in the 12 prisons and the various prison camps, and another 750 beds in pre-release centers. In 1982, it had been about 20 years since the state had built a new prison.

In January 1982, there were 28,500 inmates in the California prison system, which was 4,000 more than the system's designed capacity. The Department of Corrections estimated in 1982 that by July 1986, there would be as many as 44,600 inmates.

Election results

Proposition 1
Approveda Yes 2,925,215 56.1%

Ballot summary

Proposition 1's official ballot summary said:

"This act provides for a bond issue of four hundred ninety-five million dollars ($495,000,000) to be used for the construction of the state prisons."

Fiscal impact

The fiscal estimate provided by the California Legislative Analyst's Office said:

"The general obligation bonds authorized by this measure would be repaid over a period of up to 20 years. Under current law the state can sell bonds at any interest rate up to 11 percent.
If the full $495 million in general obligation bonds are sold at the maximum interest rate (11 percent) and are paid off over a 20-year period, the interest cost to the state would be approximately $572 million. Thus, the cost of paying off the bonds authorized by this measure could total $1.067 billion. The cost would be less if the bonds were sold at interest rates less than 11 percent. This cost would be paid by the State General Fund using revenues received in future years.
The interest paid by the state on these bonds would be exempt from the state personal income tax. Therefore, to the extent that the bonds are purchased by California taxpayers in lieu of taxable bonds, the state would experience a loss of income tax revenue. It is not possible, however, to estimate what this revenue loss would be.
The new prison facilities contemplated by this bond measure would increase the annual operating cost incurred by the State Department of Corrections. This is because it is more expensive to administer and operate new prison facilities than it is to maintain overcrowded conditions within existing prisons. It is not possible to estimate this additional cost with any degree of accuracy, but the additional cost would be major. Such costs might be incurred even if this measure is not approved, were the state to finance the construction of additional prison facilities using tax revenues.

Path to the ballot

The California State Legislature voted to put Proposition 1 on the ballot via Senate Bill 153 (Chapter 273, Statutes of 1981).

Votes in legislature to refer to ballot
Chamber Ayes Noes
Assembly 55 18
Senate 28 1

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