Commentary: Politics may defeat common sense on bonds

When governments seek permission to borrow money through bonds, telling voters how much and for how long taxes will be increased to repay those loans is just common sense.

In fact, the Legislature last year passed such a law, requiring bond measures or taxes proposed by local governments or school districts to state “the amount of money to be raised annually and duration of the tax to be levied.” It was carried by Assemblyman Jay Obernolte, a Big Bear Lake Republican.

Common sense, it would appear, had prevailed. But maybe not.

The new law went into effect on Jan. 1, and would have its first effect on measures for the June primary election. However, many of the 40 local school bond measures pending for that election, totaling about $3 billion, don’t contain the required tax disclosures and/or violate another state law requiring ballot language to be “a true and impartial synopsis…in language that is neither argumentative nor likely to create prejudice for or against the measure.”

The proposals are full of pro-passage phrases, saying the money’s needed to improve educational outcomes, keep money out of the hands of state officials and repair badly dilapidated facilities.

Fixing “leaking roofs” is a common phrase, but few of the promised benefits are specific, giving school officials almost unlimited latitude to spend the bond money as they wish, even though state law also requires proposals to contain “specific school facilities projects” to be financed.

The evident discrepancies in the bond measures’ wordage were uncovered by Richard Michael, a self-appointed Southern California bond watchdog. He compiled a report on the school bond measures and wrote letters to local authorities demanding that they comply with the laws governing their drafting, including the new Obernolte law. But his pleas were ignored.

It’s possible, though not probable, that faulty measures would be challenged in court and cancelled, even if they are approved by voters.

Obernolte’s law had sparked much criticism from school officials. They said it was too difficult to obey, although another likely motive is that they feared voters would reject bonds if their full costs were revealed.

The critics have now persuaded Obernolte to introduce a new bill that exempts all local bond measures, including those of non-school agencies, from placing tax estimates in their ballot labels.

“Unfortunately, we have realized that it is near to impossible to comply with the requirements of AB 195 for general obligation (GO) bonds,” Obernolte’s chief of staff, Teresa Trujillo, said in an email.

“GO bond taxes can vary widely from year to year and property to property. While it is possible to estimate the rate and duration of the property tax that will be needed to pay off all of the bonds authorized by a bond measure, it is near impossible to include this information in the ballot label.”

Trujillo notes that estimates of tax effects would still appear in sample ballots, which don’t have the 75-word description limit of labels on actual ballots.

In fact, however, some of this year’s school bond proposals do comply with the law, providing good faith estimates of their tax consequences, so it’s not impossible. And eliminating the flowery pro-passage language that appears to be illegal itself would leave room for explaining tax effects within the 75-word limit.

If Obernolte’s new bill passes, political expediency again will have defeated common sense.

Michael’s response to Obernolte’s pirouette?

“Corruption at its finest, wouldn’t you say? There was no problem in complying with the law, as written. Are there any defenders of taxpayers left?”