Bonds

California bill to ease bond passage advances

California legislation designed to alter transparency laws that have had a “chilling effect” on bond measure passage cleared its first hurdle.

The Senate’s Governance and Finance Committee approved Senate Bill 532 by a 5-1 vote Wednesday, the bill will now move to the Elections and Constitutional Amendments Committee.

State Sen. Scott Wiener, D-San Francisco, who introduced the legislation in February, said he voted for the second of the two transparency bills, approved in 2015 and 2017, but they have not had the intended effect.

Wiener’s bill would allow information about the financial impact of ballot measures to be placed in the voter information guide, rather than having to fit all the information on a 75-word ballot.

“It’s vital that voters clearly understand the impacts of ballot measures, which are essential to raising funds for critical services, like transportation, housing, schools and public safety,” Wiener said. “By giving cities, school districts and other local government agencies more space to explain how a measure works financially, this good government bill gives voters a more accurate sense of how a ballot measure will affect them.”

Lawmakers approved Assembly Bill 809 in 2015, requiring ballot measures that increase taxes to include in the ballot language “the amount of money raised annually and the rate and duration of the tax to be levied.” Lawmakers then approved Assembly Bill 195 in 2018 applying the requirement to bond measures.

While well-intentioned, these changes present massive — and at times insurmountable — challenges for public entities that are legally required to rely on ballot measures to raise critical funds, especially for infrastructure projects, according to Wiener’s release on the measure.

“These local governments often raise funds using complex, tiered tax structures and bond measures, and describing that financial structure can take up all or most of the 75-word ballot, leaving little to no room to explain how the new taxes or bonds will actually be spent to benefit the local community,” Wiener said.

Polling has shown a 5% to 15% decrease in support for ballot measures as a result of the changes, according to the legislation.

Agencies responded, Wiener said, by considering less progressive tax structures, less flexible bond measures to fund projects, or in some cases held off on placing measures on the ballot.

“Since the passage of the bills mentioned by the author, we have seen a chilling effect on bonds with tiered tax rates,” Christoph Mair, a legislative advocate for the American Federation of State, County and Municipal Employees, testified during the hearing. “Bonds with tiered tax rates are important in communities where we are trying to encourage equity.”

Rebekah Kalleen, a legislative advocate for the Coalition for Adequate School Housing, also testified in favor of the change, saying, voters are confused by the new ballot label requirement, which does not make sense for bonds.

“We need to provide accurate information that voters can understand, and the best place to do that is in the voter information guide,” Kalleen said. “We don’t think it’s transparent to provide information without context that we know confuses voters.”

Opponents of the measure, like the anti-tax Howard Jarvis Taxpayers’ Association, say moving the information to the voter guide reduces transparency a Senate analysis noted. Gov. Gavin Newsom vetoed Senate Bill 268, a similar bill floated by Wiener in 2019.

“I know this bill was double-referred and comes to the elections committee next, so I am going to lay off today and continue conversations with the author — but I am very troubled by the bill,” said Sen. Steve, Glazer, D-Orinda. “I know the intentions of the author and the supporters are good, but I have worked on measures here and across the country to create more transparency.”

If the 75-word length of the ballot measure is the issue, he said, then maybe the Senate needs to address that.

“This is not about reducing transparency or hiding the ball,” Weiner said. “We have data that the passage rates have gone down since these passed. We know there are school districts that are not going to ballot, because with the new law, the language is so atrocious.”

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