California voters could make it easier for cities to build fire stations and renovate hospitals—right now | Lost Coast Outpost

One of the measures on the California ballot would make it easier for local governments to build critical infrastructure and affordable housing with borrowed money. Proposition 5 would reduce the percentage of votes needed to pass bonds from the current two-thirds majority to 55%.

General obligation bonds allow local governments to finance large projects such as roads, libraries and parks. Over time, Californians pay the price by paying higher property taxes.

A number of bond measures on this year’s ballot could benefit immediately if Proposition 5 passes. Sacramento County has proposed a $415 million bond for fire station improvements. In San Francisco, $390 million in bonds will go toward hospital improvements and pedestrian safety projects.. And in rural and underserved areas of the state, where community hospitals are in immediate danger of closing, a victory on Proposition 5 could help them keep their doors open.

“It’s pretty much a no-brainer,” said Assemblywoman Cecilia Aguiar-Curry, a Davis Democrat who authored the legislation that brought the measure to voters. “Prop. 5 gives local communities a choice. Right now they have nothing but two-thirds in their arsenal.”

She called the measure, which applies to special districts, cities and counties, an “agreement” for government officials to have flexibility in how they set bail.

“They can either have a two-thirds bond with no restrictions, or they can have a 55% bond with restrictions—with accountability, transparency, citizen oversight, independent audit,” she said.

But opponents, including Susan Shelley, vice president of public affairs for the Howard Jarvis Taxpayers Association, said Proposition 5 would allow countless government agencies to place bonds on the ballot, embellishing their descriptions and downplaying their costs. Those costs, Shelley said, add up over time.

“Some of the proponents say it’s not a tax increase, but it’s an engine for raising taxes forever — and it’s bound to raise property taxes over and over again, and people will start losing their homes if that happens,” she said.

Darien Shanske, a law professor at the University of California, Davis, said the idea that bonds could push someone into insolvency is “very, very unlikely.”

“Our norm as a democratic society is that all voices are equal,” Shanske said. “Supermajority rule is a deviation from this norm. This allows one third of voters to essentially block what the vast majority would like to do.”

Voters are split on Proposition 5, with 48% percent saying they approve of the measure, according to a Public Policy Institute of California poll.

The measure is one of the most expensive on the ballot. Opponents, including the California Chamber of Commerce and the National Federation of Independent Business, raised about $30 million. Supporters of Proposition 5, such as the pro-development group California YIMBY and the labor organization California State Building and Construction Trades Council, have raised nearly $5 million.

California Constitution limits borrowing

The two-thirds vote requirement to assume local debt was enshrined in the 1879 California Constitution for local governments and school boards. Nearly a century later, voters passed the landmark Proposition 13, which limited property tax assessments and further limited government spending.

“We vote for (bonds) in the constitution as a policy issue because it is a commitment to future generations,” said Michael Coleman, an expert on California local government finance who advises cities. “Do you want to enter into this contract that obliges future generations to pay for it? But future generations will also benefit from these public improvements.”

Shanske puts it another way: The community hands over a bond to build a new bridge. For generations, people have been able to use the bridge and pay for it through taxes or fees.

“But the actual amount of money for a large project, divided across the entire community and spread over 30 years, is usually quite small,” he said. “The idea that local politicians and local voters are intentionally overloading their property tax base is highly unlikely, especially since they would also need to attract outside investors to sign off on this.”

Shelley, of the Taxpayers Association, said increased bond fees could ripple through the economy and affect many people.

“You’ll see those higher taxes pass through to higher rents, higher consumer prices, even a small donut shop in a shopping center will have higher operating costs because the property owner will pass those higher property taxes right through the lease. . ” she said.

Californians have made an exception once before, voting in 2000 to amend the school bond constitution by lowering the voting threshold to 55%.

“This has really opened the door and made it much easier for schools to take these measures. And that’s essentially the same thing as Proposition 5—bringing cities, counties and special districts to the same level of ability,” Coleman said.

Coleman tracks votes on general obligation bonds as part of his work advising California cities. About half of the general obligation bonds are passing, he said. Of those that fail, about half receive more than 55% of the vote but fail to overcome the two-thirds margin. If Proposition 5 passes, he expects to see a passage rate of 70% to 80% for general obligation bonds.

“There are a lot of needs,” Coleman said. “I think we’ll see more local governments say, ‘Hey, there’s now a real chance that we can get this legislation passed – that the will of the community can be implemented at the ballot box.’

California public hospitals ask for earthquake bonds

Over the years, many housing and infrastructure bonds have failed with little profit. Those in favor of Proposition 5 have cited some failures. In 2023, a fire safety bond failed in Santa Cruz County despite receiving 66% of the vote. Berkeley’s 2022 affordable housing bond failed with 59% of the vote. In Whittier, library bonds failed at a rate of 66% in 2017.

Those failures also include efforts by the Antelope Valley Health District, which tried and failed three times to post a bond for its community hospital north of Los Angeles, according to the Association of California Health Districts. He failed in 2022 with 57% of the vote.

The district is one of 77 health districts, a kind of “special district” throughout California. They were created in the 1940s to provide critical services such as hospitals, ambulances and skilled nursing facilities to rural and underserved communities.

Beach Cities Health District in Redondo Beach on October 27, 2024. Photo by Jules Hotz for CalMatters.

“The challenge, however, is that they are publicly owned and government entities, so they are very limited in how they can finance large-scale or even medium-to-small infrastructure projects,” said Sarah Bridge, vice president. President of Advocacy and Strategy for the Association of California Health Districts. “We have very little profit.”

The 33 health districts that operate public hospitals are subject to a state mandate to retrofit their buildings to be seismically safe by 2035. But to this day, the Antelope Valley Health District and many others are still working to secure the funds to make these changes. If they fail to comply with the state mandate, they will be forced to close.

At least two health districts have bonds on the November ballot, including one in Redondo Beach.

From his office window, Tom Bakali, CEO of the Beach Cities Health District, looks out over a sea of ​​asphalt. But that will change if voters in three Los Angeles cities approve a $30 million bond at an estimated cost of $3 per $100,000 of assessed value for property owners.

The asphalt will be transformed into two acres of open space for community health and wellness programs such as yoga and Zumba. In an adjacent corner of the medical campus, a youth mental health facility that has seen about 9,000 visits in the past two years will be expanded. And the 1960 hospital was demolished due to seismic problems.

Beach Cities Health District administrative offices and Shirley Rogers Student Services Center in Redondo Beach on October 27, 2024. Photo by Jules Hotz for CalMatters.

“The idea is to create a place where people can come and get well,” Bakali said. “I think this is a great opportunity for voters to decide what they want.”

In the small coastal town of Cambria, the city’s public health district has proposed a $5.9 million bond to build an ambulance station.

“We consider (our ambulances) our lifeline,” said Cambria Health District board member Laurie Mealer.

She said the ambulance crew works in a 70-year-old building that was not designed for 24-hour use. The new building will include a parking garage for emergency vehicles, a decontamination room and additional storage space.

The bond will cost property owners an average of about $50 a year, Mealer said.

“That’s a cup of coffee a month,” she said. “We feel it’s time for the community to step up and share their commitment to our service.”

This is their second attempt. Two years ago, the health district’s bond for a new ambulance station collapsed at 61.4%, a shortfall of about 200 votes.

“For a small agency that doesn’t really have the cash reserves that can actually pay for infrastructure, we really rely on bonds. And setting the threshold so high makes it very difficult,” she said. “We are confident that we will get more than 60% again. The question is whether we can reach 66.7%. It would be heartbreaking if we lost by one vote.”

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Kayla Mihalovich is a California local news contributor.

CalMatters.org is a nonprofit, nonpartisan media enterprise explaining California politics and politics.