What are ballot measures and what are the different types in California?
A ballot measure is any question or issue that appears on an election ballot to be approved or rejected by voters. In 26 states, plus Washington, D.C., citizens may use the initiative and referendum process, which permits citizens to petition to place measures on the ballot and usually involves a signature collection process of some kind. In California, ballot initiatives may also be legislatively-referred, which means that the state legislature votes to add the initiative to the ballot. Even in states without initiative and referendum processes, however, ballot measures exist. In all states, citizens may be asked to approve legislatively referred constitutional amendments, state statutes, bond issues or tax proposals.
Starting in 2010, ballot propositions in California were only put on the ballot during even-numbered years. Moreover, in 2011, California lawmakers passed a bill requiring all citizen-initiated measures—initiatives and veto referendums—to appear before voters during the general election in November or even-numbered years. Legislatively-referred constitutional amendments and state statutes, plus statewide bond propositions, can appear on the ballot during primary or general elections.
In California, ballot measures come in the following forms:
- Initiated constitutional amendment: An amendment to the state's constitution that comes about through the initiative process (i.e., a ballot initiative that is put before voters and would change the California constitution).
- Initiated state statute: Also called simply "initiative statute," it is a new law that a state adopts via the ballot initiative process. The most common form of initiated state statute is when groups collect signatures and once those signatures are collected, election officials place the measure on the ballot for a vote.
- Legislatively-referred constitutional amendment: A proposed constitutional amendment that appears on a state's ballot as a ballot measure because the state legislature in that state voted to put it before the voters.
- Legislatively-referred state statute: Also called simply "legislative statute," it is a statute that appears on a state's ballot as a ballot measure because the state legislature in that state voted to put it before the voters.
- Statewide bond proposition: Mandated by Article XVI of the California Constitution. Section 1 of Article XVI says that the California State Legislature can't borrow ("create a debt") more than $300,000 unless the legislature agrees to enter into the debt "...by a two-thirds vote of all the members elected to each house of the Legislature and until, at a general election or at a direct primary, it shall have been submitted to the people and shall have received a majority of all the votes cast for and against it at such election." Therefore, the state cannot borrow more than $300,000 without putting it to the voters for approval after it has been approved by a two-thirds vote of each house of the Legislature.
- Veto referendum: A synonym for citizen referendum, statute referendum and statute remand. It refers to times when 1) A legislative body such as a state legislature, city council or county commission, enacts a new law and 2) A group that opposes the new law collects enough signatures within the statutory timeframe in that state to place that new law on a ballot for the voters in the relevant political subdivision to either ratify the new law, or reject it.
- Recall of (non-federal) statewide officials: Recall elections are used to remove a statewide (non-federal) elected official from office. The authority to conduct a recall election in California applies to officials at the state and local levels; as with most states, the right of recall in California does not extend to recalling federal politicians. In California, citizens can recall judges of courts of appeal and trial courts.
State Bonds and Their Costs
What Are Bonds? Bonds are a way that governments and companies borrow money. The state government uses bonds primarily to pay for the planning, construction, and renovation of infrastructure projects such as bridges, dams, prisons, parks, schools, and office buildings. The state sells bonds to investors to receive “up-front” funding for these projects and then repays the investors, with interest, over a period of time.
Why Are Bonds Used? A main reason for issuing bonds is that infrastructure typically provides services over many years. Thus, it is reasonable for people, both currently and in the future, to help pay for the projects. Also, the large costs of these projects can be difficult to pay for all at once.
What Are the Main Types of Bonds? The two main types of bonds used by the state are general obligation bonds and revenue bonds. One difference between general obligation bonds and revenue bonds is how they are repaid. The state typically repays general obligation bonds using the state General Fund (the state's main operating account, which it uses to pay for education, prisons, health care, and other services). The General Fund is supported primarily by income and sales tax revenues. The state often repays revenue bonds from other sources, such as fees paid by users of the funded project (such as from bridge tolls). Another difference between state general obligation and revenue bonds is how they are approved. General obligation bonds issued by the state have to be approved by voters, while revenue bonds do not.
What Are the Costs of Bond Financing? After selling bonds, the state makes annual payments over the next few decades until the bonds are paid off. (This is similar to the way a family pays off a mortgage.) The state pays more for a project funded by bonds than if the state does not borrow money for the project because of the interest costs. The amount of additional cost depends primarily on the interest rate and the time period over which the bonds have to be repaid.
Source: Overview of State Bond Debt. LAO