The Bonds issues on the ballot - Proposition 3,10,12

Bond issues on this ballot deal with Children's Hospitals ($980 million - which becomes $2 billion when the bonds are paid off),Alternative Fuel Vehicles ($3.425 billion becomes about $10 billion in future costs) and Veterans Housing ($900 million - $1.8 billion in future costs). Ultimately my thoughts on bonding are based first on a theory of the capacity of the state to borrow money. If we borrow too much, no matter how worthy the cause, our credit rating as a state goes down.

The second consideration I have on any bonding measure, if it passes the first test is whether the bond has any tweaks in it. Prop 3 focuses the hospital bonds on specific childhood diseases. Prop 10 focuses about a third of the dough on R&D.

Prop 3 is the second hospital bond measure in the last four years.(Prop 61). Also the definition of what constitutes a "children's hospital" is a bit loose. Part of this measure helps to fund acute care - which is pretty much in trouble. The arguments on Proposition 3 can be found at this address.

Prop 10 does a mish-mash of projects including funding a lot of R&D on cleaner fuels and provide rebates for people who buy more efficient vehicles. T. Boone Pickens funded the signature campaign for this proposal because in part it moves Californians toward one end of the "clean" fuels market. The arguments on this issue are here.

Prop 12 among the three bond measures on the November ballot provides funds to buy assets which produce payments to fund the bonds. California has had a veterans home program for almost 90 years. The remaining funds from the last Vets bond amount to about $100 million. The program is limited to vets who served in time of war - but not actually to combat veterans. The arguments on Proposition 12 are at this address.

Of the three, the least defensible in my mind is Proposition 10, but Proposition 3 is not far behind. I would vote NO on 3 and 10. The state's debt capacity is under pressure and even if the proposed purposes were appropriate and especially for Prop 10 I am not sure that they are, now is not the time to expand General Obligation bonds. Prop 12 is more of a question. On the one hand, the program is self financing, it provides housing loans for real assets for people who served their country. On the other hand, some would argue against these bonds on the capacity argument. I am generally pretty tough on any bond but inclined to vote for Prop 12 but if you are a fiscal conservative, vote against all three.