California Proposition 78, Bonds for Higher Education (1988)
Proposition 78 authorized a bond issue of $600 million to provide funds for the construction or improvement of facilities of California's public higher education institutions, including the University of California's nine campuses, the California State University's 19 campuses, the 70 districts of the California community colleges, and the California Maritime Academy.
Text of measure
The ballot title was:
The official summary said:
- "This act provides for a bond issue of six hundred million dollars ($600,000,000) to provide funds for the construction or improvement of facilities of California's public higher education institutions, including the University of California's nine campuses, the California State University's 19 campuses, the 70 districts of the California community colleges, and the California Maritime Academy. The use of funds authorized under this act includes, but is not necessarily limited to, the construction or improvement of classrooms, laboratories, and libraries, and the implementation of earthquake and other health or safety improvements."
- See also: Fiscal impact statement
The fiscal estimate provided by the California Legislative Analyst's Office said:
- Direct Costs of Paying Off the Bonds. For these types of bonds, the state typically makes principal and interest payments from the state's General Fund over a period of about 20 years. If all of the authorized bonds were sold at an interest rate of 7.5 percent, the cost would be about $1.1 billion to pay off both the principal ($600 million) and interest (about $475 million). The average payment for principal and interest would be about $50 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 do not have 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 taxes. This loss of revenue cannot be estimated.
- Paying Off Loans to Community Colleges. This measure requires that any General Fund money loaned to community colleges be repaid from future revenue from the state's tidelands oil or from money received from the sale of these bonds.
Path to the ballot
The California State Legislature voted to put Proposition 78 on the ballot with Senate Bill 703 (Statutes of 1988, Ch. 44).
|Votes in legislature to refer to ballot|
- PDF of the November 8, 1988 ballot proposition voter guide
- California Law Library, November 8, 1988 ballot propositions
- Hastings California I&R database