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object(Timber\Post)#3711 (44) { ["ImageClass"]=> string(12) "Timber\Image" ["PostClass"]=> string(11) "Timber\Post" ["TermClass"]=> string(11) "Timber\Term" ["object_type"]=> string(4) "post" ["custom"]=> array(5) { ["_wp_attached_file"]=> string(34) "JTF_FinancingInfrastructureJTF.pdf" ["wpmf_size"]=> string(6) "600813" ["wpmf_filetype"]=> string(3) "pdf" ["wpmf_order"]=> string(1) "0" ["searchwp_content"]=> string(4849) "FINANCING INFRASTRUCTURE SEPTEMBER 2008 ƒ CALIFORNIA SPENDS ABOUT AS MUCH ON INFRASTRUCTURE AS THE NATIONAL AVERAGE. State and local government expenditures on capital outlays declined sharply in the 1970s in California  and the nation, as measured in inflation‐adjusted dollars. Spending picked up again in the early 1980s  and then increased quickly between 1997 and 2002. In 2002, California spent $1,167 per person on  capital outlays, compared to $1,150 in the nation as a whole (in 2007 dollars). This is 25% more than   the state spent per person in 1967—the previous high point in its infrastructure spending.   ƒ GENERAL OBLIGATION BONDS HAVE BECOME INCREASINGLY IMPORTANT. In 2005–06, 73% of California’s state revenues for infrastructure financing were estimated to derive  from bonds, compared to 42% in 1965–66. Since 1972, California voters have approved $178 billion   in general obligation bonds (in 2007 dollars), with more than half approved over the past decade.   State bonds are easier to pass than local bonds, because they require only a simple majority of voter  approval. Most local bonds require a two‐thirds majority (local education bonds require a 55%  majority). If the five state infrastructure bonds that passed in November 2006 had been subject to   local voting thresholds, only one (an education bond) would have passed.   ƒ EDUCATION: PROPOSITION 39 HAS FACILITATED PASSAGE OF LOCAL SCHOOL BONDS. Rising enrollments and low per‐student spending in the 1980s and most of the 1990s led to classroom  shortages in K–12 education and projected shortages in higher education. Since 2001, voters have  approved $28.7 billion in state bonds and $36 billion in local bonds for K–12 facilities, $7 billion in state  bonds for higher education, and $17.5 billion in local bonds for community colleges. For local school  bonds, the passage in November 2000 of Proposition 39—which lowered the voter majority from two‐ thirds to 55%—has been instrumental: 53% of K–12 bonds and 75% of community college bonds that  passed since then would not have passed under the 2/3 majority requirement.   ƒ WATER MANAGEMENT: LOCAL FINANCING HAS BECOME MORE DIFFICULT. Since the 1996 passage of Proposition 218 (which changed local government finance rules), local flood  control and stormwater managers have faced a two‐thirds voter majority requirement to raise fees.  Until recently, water and wastewater utilities also faced fewer constraints, needing only majority  approval from their boards to raise rates; but since a 2006 court ruling, they must offer property owners  an opportunity to reject rate increases.   ƒ TRANSPORTATION: LOCAL FINANCE IS CHALLENGING, FEDERAL AND STATE FUNDING IS IMPROVING. Rising fuel efficiency and inflation have eroded the value of California’s primary transportation  funding sources – federal and state gas taxes (currently 18.4 and 18 cents per gallon, respectively).  Nineteen counties are using optional county sales taxes to help fill the gap. Getting voter approval for  introducing or renewing these taxes has become more difficult since Proposition 218. However, the  latest federal transportation spending bill in 2005 has improved the outlook for state transportation  funding, as has a $20 billion state bond passed in November 2006.     www.ppic.org 2008 per capita $ Per Capita State and Local Capital Outlay Expenditures, 1957–2002 State General Obligation Bonds for Infrastructure, 1972–2006 $178 billion (2007 $) 1400 1200 1000 800 600 400 200 0 Governor Pat Brown era Proposition 13 California United States 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 Veterans home loans 7% Seismic 3% Housing 4% Other 4% Public safety 7% Natural resources 16% Transportation 15% State Infrastructure Bonds on November 2006 Ballot K–12 schools 34% Higher education 10% 80 Threshold for Approval 70 2/3 majority 64.0 61.2 (local bonds) 60 57.4 53.7 56.5 55% majority (education bonds) 50 50% majority (state bonds) 40 % of yes votes 30 % yes votes 20 10 0 Flood Control Transportation ($4.1 B) ($20 B) Housing ($2.9 B) Water & Parks ($5.4 B) Schools ($10.4 B) Note: Under local bond rules, only one bond on the November 2006 ballot would have passed. Sources: California State Controller. California Department of Finance. California Secretary of State. U.S. Census Bureau. Contact: Ellen Hanak" } ["___content":protected]=> string(146) "

JTF FinancingInfrastructureJTF

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State and local government expenditures on capital outlays declined sharply in the 1970s in California  and the nation, as measured in inflation‐adjusted dollars. Spending picked up again in the early 1980s  and then increased quickly between 1997 and 2002. In 2002, California spent $1,167 per person on  capital outlays, compared to $1,150 in the nation as a whole (in 2007 dollars). This is 25% more than   the state spent per person in 1967—the previous high point in its infrastructure spending.   ƒ GENERAL OBLIGATION BONDS HAVE BECOME INCREASINGLY IMPORTANT. In 2005–06, 73% of California’s state revenues for infrastructure financing were estimated to derive  from bonds, compared to 42% in 1965–66. Since 1972, California voters have approved $178 billion   in general obligation bonds (in 2007 dollars), with more than half approved over the past decade.   State bonds are easier to pass than local bonds, because they require only a simple majority of voter  approval. Most local bonds require a two‐thirds majority (local education bonds require a 55%  majority). If the five state infrastructure bonds that passed in November 2006 had been subject to   local voting thresholds, only one (an education bond) would have passed.   ƒ EDUCATION: PROPOSITION 39 HAS FACILITATED PASSAGE OF LOCAL SCHOOL BONDS. Rising enrollments and low per‐student spending in the 1980s and most of the 1990s led to classroom  shortages in K–12 education and projected shortages in higher education. Since 2001, voters have  approved $28.7 billion in state bonds and $36 billion in local bonds for K–12 facilities, $7 billion in state  bonds for higher education, and $17.5 billion in local bonds for community colleges. For local school  bonds, the passage in November 2000 of Proposition 39—which lowered the voter majority from two‐ thirds to 55%—has been instrumental: 53% of K–12 bonds and 75% of community college bonds that  passed since then would not have passed under the 2/3 majority requirement.   ƒ WATER MANAGEMENT: LOCAL FINANCING HAS BECOME MORE DIFFICULT. Since the 1996 passage of Proposition 218 (which changed local government finance rules), local flood  control and stormwater managers have faced a two‐thirds voter majority requirement to raise fees.  Until recently, water and wastewater utilities also faced fewer constraints, needing only majority  approval from their boards to raise rates; but since a 2006 court ruling, they must offer property owners  an opportunity to reject rate increases.   ƒ TRANSPORTATION: LOCAL FINANCE IS CHALLENGING, FEDERAL AND STATE FUNDING IS IMPROVING. Rising fuel efficiency and inflation have eroded the value of California’s primary transportation  funding sources – federal and state gas taxes (currently 18.4 and 18 cents per gallon, respectively).  Nineteen counties are using optional county sales taxes to help fill the gap. Getting voter approval for  introducing or renewing these taxes has become more difficult since Proposition 218. However, the  latest federal transportation spending bill in 2005 has improved the outlook for state transportation  funding, as has a $20 billion state bond passed in November 2006.     www.ppic.org 2008 per capita $ Per Capita State and Local Capital Outlay Expenditures, 1957–2002 State General Obligation Bonds for Infrastructure, 1972–2006 $178 billion (2007 $) 1400 1200 1000 800 600 400 200 0 Governor Pat Brown era Proposition 13 California United States 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 Veterans home loans 7% Seismic 3% Housing 4% Other 4% Public safety 7% Natural resources 16% Transportation 15% State Infrastructure Bonds on November 2006 Ballot K–12 schools 34% Higher education 10% 80 Threshold for Approval 70 2/3 majority 64.0 61.2 (local bonds) 60 57.4 53.7 56.5 55% majority (education bonds) 50 50% majority (state bonds) 40 % of yes votes 30 % yes votes 20 10 0 Flood Control Transportation ($4.1 B) ($20 B) Housing ($2.9 B) Water & Parks ($5.4 B) Schools ($10.4 B) Note: Under local bond rules, only one bond on the November 2006 ballot would have passed. 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