California Proposition 74, the Deddeh Transportation Bond Act (June 1988)
Proposition 74 authorized $1 billion in general obligation bonds to provide funds for "local streets and roads, state highways, and exclusive public mass transit guideways."
Text of measure
The ballot title was:
The official summary said:
- "This act provides for a bond issue of one billion dollars ($1,000,000,000) to provide funds for capital improvements for local streets and roads, state highways, and exclusive public mass transit guideways."
- See also: Fiscal impact statement
The fiscal estimate provided by the California Legislative Analyst's Office said:
- Direct Costs of Paying Off the Bonds. The state would make principal and interest payments on these bonds from the state's General Fund over a period of about 20 years. Assuming all of the authorized bonds are sold at an interest rate of 7.5 percent, the cost would be about $1.8 billion to pay off both the principal ($1 billion) and interest (about $790 million). The average payment for principal and interest would be about $90 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.
- 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 taxes. This loss of revenue cannot be estimated.
Path to the ballot
The California State Legislature voted to put Proposition 74 on the ballot in Senate Bill 140 (Statutes of 1988, Ch. 24).
|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