Proposition 68: Authorizes Bonds Funding Parks, Natural Resources Protection, Climate Adaptation, Water Quality and Supply, and Flood Protection
Should the State sell $4.1 billion in bonds to fund parks, natural resources protection, climate adaptation, water quality and supply, and flood protection?
California operates programs to protect the environment, conserve natural resources, prevent floods, ensure safe drinking water, other water related programs, and parks. The State also provides grants and loans to local governments and other organizations for similar programs. Almost $5 billion each year is spent on such programs. The money comes from a combination of the sale of general obligation bonds issued by the State, revenue generated by fees, and the State’s General Fund, which is the state’s main operating fund.
During the past 17 years voters approved almost $27 billion in general obligation bonds for various natural resources projects, of which the State still has almost $9 billion available. Most of that money is available for water quality, supply and infrastructure purposes authorized by Proposition 1 in 2014.
General obligation bonds are sold to investors and are paid off from the State’s General Fund. The State repays the principal and interest over time, often several decades.
This proposition will allow the State to sell $4.1 billion in bonds. The amount includes $4 billion new bonds and $100 million previously authorized, but unsold bonds.
The proposition provides funding to state departments and local agencies for specific natural resources related purposes. The money is designated for a wide range of projects across the State including: natural resource and wildlife conservation; climate preparedness to address the effects of climate change; ocean, coastal, and river improvements; maintenance of and creation of parks and recreation projects; and water quality and groundwater preservation projects.
Proposition 68 requires at least 15%-20% of the funds for each use specified for use in “disadvantaged communities.” Local governments will be affected by this proposition because they can use bond money by agreeing to cost sharing to pay for projects.
Repaying the bonds is expected to cost an estimated $200 million each year for 40 years, resulting in a total cost of $7.8 billion. There may be savings to local governments in tens of millions of dollars because the bond money available will relieve the local governments from paying for all of a project. There are unknown costs and savings associated with the actual operation and impacts of the projects produced.