California Proposition 151, Childcare Facilities Bond Act (1990)
If Proposition 151 had passed, it would have authorized the State of California to sell $30 million in general obligation bonds, incurring that much indebtedness, to provide funds for childcare facilities.
The fiscal estimate provided by the California Legislative Analyst's Office said:
- Direct Costs of Paying Off the Bonds.
- The state would receive loan repayments under the child care facilities loan program discussed above. These repayments, however, would be used to make additional loans, and not to repay the general obligation bonds. As a result, the state's General Fund would be responsible for the principal and interest payments on the bonds, 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 taxes. While the interest on these bonds would be exempt from state taxes, it is not clear whether the state would issue the bonds as federally taxable bonds or as federally tax-exempt bonds. This will depend on decisions about issuing the bonds made by the State Treasurer's Office in conjunction with the Child Care Facilities Authority.
- If the bonds are subject to federal taxes, the interest rate on these bonds would be higher than on most other state bonds. If the authorized bonds are sold at an interest rate of 9.5 percent, the state General Fund cost would be about $60 million to pay off both the principal ($30 million) and the interest ($30 million). The average payment would be about $2.5 million per year.
- If the bonds are not subject to federal taxes, and all of the bonds authorized by this measure are sold at an interest rate of 7.5 percent, the state General Fund cost would be about $55 million to pay off both the principal ($30 million) and the interest ($25 million). The average payment for principal and interest would be about $2.3 million per year.
- Costs to Administer the Program.
- The Child Care Facilities Authority may use up to $3 million of the bond proceeds to pay the costs of administering the program. To the degree feasible, the authority is required to charge loan recipients a surcharge sufficient to recover the costs of program administration. The annual costs for administering the program cannot be estimated.
- Costs to Local Governments.
- To the extent that local governments (including school districts) receive child care facilities loans, they would incur loan repayment costs. The measure provides that repayments shall be based on the principal and interest costs of the general obligation bonds, plus administrative costs. Because it is not known what proportion of the bond proceeds would be allocated to local government agencies, the exact magnitude of these costs cannot be estimated. The local governments may be able to use the child care fees charged to parents to cover part or all of their loan repayment costs.
Path to the ballot
The California State Legislature voted to put Proposition 151 on the ballot with Senate Bill 78 (Statutes of 1990, Ch. 922) in accordance with the provisions of Article XVI of the California Constitution.
- Hastings California I&R database
- Los Angeles Law Library, 1990 ballot propositions (dead link)
- November 1990 election results (pages 9-10)