California Proposition 12 (2008)

From Ballotpedia

Proposition 12 appeared on the November 4, 2008 ballot in California, where it passed with 63.5% of the vote.^[1]

Proposition 12 is also known as the Veterans' Bond Act of 2008. The measure was legislatively-referred to the ballot in Senate Bill 1572. The primary sponsor of SB 1572 was Senator Mark Wyland, R-Carlsbad.

Prop 12 authorized issuance of $900 million in bonds to create a fund that assist veterans who are purchasing farms, homes and mobile home properties.^[2]

Election results

Proposition 12 received a majority of the votes in each of California's 58 counties.

California Proposition 12
		Votes	Percentage
Yes		7,618,136	63.5%
No		4,385,715	36.5%
Total votes		12,003,851	100%

Fiscal impact

The non partisan California Legislative Analyst's Office estimates the proposition will result in costs of about $1.8 billion to pay off both the principal ($900 million) and interest ($856 million) on the bonds; costs paid by participating veterans. Average payment for principal and interest of about $59 million per year for 30 years.

History of veterans' bonds in California

California began the veterans' home loan programs in the 1922. California voters have subsequently been asked 26 times to fund the program and have voted "yes" all 26 times, for a total of $8.4 billion in the past. The 2008 effort is the 27th time voters will have been asked to support the program. Prop. 12's request for $900 million is the largest request for a Cal-Vet bond.^[3]

Taxpayer's perspective

Proposition 12 would issue bonds worth $900 million for aid to veterans, with 30-year repayment costs of $1.8 billion. Taxpayer advocates would prefer that funding requests for aid go through the general appropriation process, due to the high payback costs for bonds.^[4]

Supporters

The vote to place the measure on the ballot was passed unanimously in both the California state senate (39-0) and assembly (75-0).

Supporters included:

• Senator Mark Wyland, R-Carlsbad, primary sponsor of Proposition 12
• Gov. Arnold Schwarzenegger

Arguments in Favor

Notable arguments made in support of the measure included:

• The Veterans Bond Act will help California's veterans achieve the American dream of homeownership.
• Veterans who risked their lives in places like Kuwait, Iraq and Afghanistan will be eligible to join the more than 420,000 others who have bought a home with a CalVet loan
• Loans are repaid, along with all program costs, by the loan holders at no expense to the taxpayers
• There have never been any costs to the taxpayers under the previous authorizations
• The program helps reinforce the housing market in California
• Cal Vet loans generate thousands of housing industry-related jobs resulting in millions of dollars in annual payrolls.

Newspaper editorials in favor

The Los Angeles Times^[5]

Opponents

Opponents included:

• Gary Wesley
• The Libertarian Party of California

Arguments in opposition

Notable arguments made in opposition included:

• Voters may wish to end the program rather then continue it
• Benefits are not limited to only veterans who served in a combat zone but to any that served during a time of war, possibly resulting in unavailable funds for those who actually served in harm's way
• Eligible beneficiaries of the program may have never even left the United States
• The interest on the bonds is federal and state tax free, which in a roundabout way means all taxpayers are paying some costs
• State taxpayers will be liable for any shortfall in the event beneficiaries fail to make payments and are unable to sell the home for full value^[6][7]
• The state government should not be in the business of providing loans

External links

• Complete text of Proposition 12
• California Voter Guide for Proposition 12
• Home loan bond act for vets on November ballot
• California Voter Online guide to Proposition 12
• Smart Voter Guide to Proposition 12
• Prop 12 would extend veteran home loan program
• Institute of Governmental Studies Hot Topic: Proposition 12

References

1. ↑ Official election results
2. ↑ KCBS: "Veterans Bond Act Placed On State Ballot," July 15, 2008
3. ↑ Sacramento Bee: "Proposition 12: Veterans Bond Act of 2008," September 17, 2008
4. ↑ National Taxpayers Union, "General Election Ballot Guide 2008, The Taxpayer's Perspective"
5. ↑ Los Angeles Times: "Yes on California bonds; Bullet trains, children's healthcare and veterans' housing all deserve support," October 2, 2008
6. ↑ Proposition 12 Quick Reference
7. ↑ California Prop 12, arguments pro and con

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