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California Proposition 77, Bonds for Earthquake Safety Projects (June 1988)
Proposition 77 authorized $150 million in general obligation bonds to provide funds for a California Earthquake Safety and Housing Rehabilitation program.
Text of measure
The ballot title was:
The official summary said:
- "This act provides for a bond issue of one hundred fifty million dollars ($150,000,000) to provide funds for a California Earthquake Safety and Housing Rehabilitation program."
- See also: Fiscal impact statement
The fiscal estimate provided by the California Legislative Analyst's Office said:
- Direct Cost of Paying Off the Bonds. For these types of bonds, the state typically would make principal and interest payments 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 $270 million to pay off both the principal ($150 million) and interest ($120 million). The average payment would be about $13 million each year.
- Borrowing Costs for Other Bonds. By increasing the amount that the state borrows through bond sales, this measure may cause the state and local governments to pay higher interest costs on bonds sold to support other programs. These higher interest costs, which would result from higher interest rates, cannot be estimated.
- Impact on 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 taxable investments, the state would collect less income taxes. This loss of revenue cannot be estimated.
Path to the ballot
The California State Legislature voted to put Proposition 77 on the ballot in Assembly Bill 2032 (Statutes of 1988, Ch. 27).
|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