Dec. 22, 2015 / Press Release /Stop Blank Checks
SACRAMENTO, CA – This weekend, Sacramento Bee columnist, Dan Walters, wrote an article on the Stop Blank Checks measure, highlighting the loophole that allows politicians to issue massive new debt to pay for multi-billion dollar projects without voter approval. The measure recently qualified for the November 2016 ballot earlier this year and will require statewide voter approval for state revenue bonds costing more than $2 billion.
Read excerpts from the article, “Farmer’s measure hits bond,” below:
“…Theoretically, there are good reasons why GO bonds need voter approval, while revenue bonds don’t. But the once-clear separation between the two has been blurred by politicians who don’t want to risk rejection by voters.
Most notably, after voters rejected a bond issue to build more prisons in the 1980s, the Legislature and successive governors plowed ahead anyway by creating a phony revenue bond financing system.
They created a special agency to issue revenue bonds, build the prisons and then “lease” them to the state prisons department. Thus, the “revenue” to repay the bonds came straight out of the state general fund, just as it would have done with general obligation bonds. In fact, the financial community treats them like general obligation bonds.
As long as these smarmy voter-avoidance schemes exist, perhaps subjecting big revenue bond issues to voter approval isn’t such a bad idea…”
Read the article in its entirety here: http://www.sacbee.com/news/politics-government/dan-walters/article50592250.html
The Stop Blank Checks initiative (15-0003) would require statewide voter approval for state revenue bond projects costing more than $2 billion, closing a loophole that allows politicians to issue massive new debt for multi-billion dollar projects without voter approval. For more information on the initiative, visit www.StopBlankChecks.com.