30 | Title and Summar y / Analysis
PROPOSITION ALLOWS LOCAL BONDS FOR AFFORDABLE HOUSING AND PUBLIC INFRASTRUCTURE WITH 55% VOTER APPROVAL.
LEGISLATIVE CONSTITUTIONAL AMENDMENT.5
OFFICIAL TITLE AND SUMMARY PREPARED BY THE ATTORNEY GENERAL
BACKGROUND
Housing Is Expensive in California. A typical
California home currently costs around twice
the national average. Similarly, renters in
California typically pay about 50 percent more
for housing than renters in other states.
Local Programs Help Pay for Housing. Some
programs help low-income Californians afford
housing. For example, governments help pay
for housing reserved for low-income residents.
Other programs provide housing and services
to specific groups. Examples of such groups
include people with disabilities or those at
risk of chronic homelessness. We refer to
affordable and supportive housing programs
as “housing assistance. ”
Local Governments Also Pay for Public
Infrastructure. Examples of infrastructure
projects paid for by local governments include
roads, hospitals, fire stations, libraries, and
water treatment facilities.
Local Governments Often Use Bonds to Pay
for Housing Assistance Programs and Public
•
Allows local bonds for affordable housing
for low- and middle-income Californians,
or for public infrastructure including roads,
water, and fire protection to be approved
by 55% of voters, rather than current
two
-thirds approval requirement.
• Bonds must include specified
accountability requirements, including
citizens oversight committee and annual
independent financial and performance
audits.
•
Allows local governments to assess
proper
ty taxes above 1% to repay
affordable housing and infrastructure
bonds if approved by 55% of voters instead
of current two-thirds approval requirement.
SUMMARY OF LEGISLATIVE ANALYST’S ESTIMATE
OF NET STATE AND LOCAL GOVERNMENT FISCAL
IMPACT:
• Increased local borrowing to fund
affordable housing, supportive housing,
and public infrastructure. The amount of
increased borrowing would depend on
decisions by local governments and voters.
Borrowed funds would be repaid with
higher proper
ty taxes.
ANALYSIS BY THE LEGISLATIVE ANALYST
The text of this measure can be found on page 94 and the Secretary of State’s website at voterguide.sos.ca.gov.
5 FINAL VOTES CAST BY THE LEGISLATURE ON ACA 1 (PROPOSITION 5) (CHAPTER 173, STATUTES OF 2023)
Senate: Ayes 29 Noes 10
Assembly: Ayes 55 Noes 12
FINAL VOTES CAST BY THE LEGISLATURE ON ACA 10 (PROPOSITION 5) (CHAPTER 134, STATUTES OF 2024)
Senate: Ayes 31 Noes 8
Assembly: Ayes 54 Noes 8
EXHIBIT 2
For the full text of Proposition 5, see page 94. Analysis | 31
ANALYSIS BY THE LEGISLATIVE ANALYST CONTINUED
Infrastructure. Bonds are a way for local
governments to borrow money and then repay
it plus interest over time. Similar to the way
a family pays off a mortgage on their home,
bonds allow governments to spread costs over
a few decades.
Certain Bonds Require Two-Thirds Approval
of Local Voters. For cities, counties, and
special districts, bonds paid for by increased
property taxes typically require two-thirds of
local voters to approve them. These are called
general obligation bonds.
PROPOSAL
Proposition 5 changes the rules in the
California Constitution for approving certain
local government general obligation bonds.
It also requires local governments to monitor
the use of revenues in specific ways.
Lowers Voter Approval Requirement for
Certain Bonds. Proposition 5 lowers the
voting requirement needed to approve local
general obligation bonds if they would fund
housing assistance or public infrastructure.
Specifically, Proposition 5 lowers the voter
approval requirement from two-thirds to
55 percent.
Requires Specific Oversight Activities.
Proposition 5 requires local governments
to take specific steps to monitor the use of
bond funds supporting housing assistance
and public infrastructure. For example, local
governments would need to conduct annual
independent financial and performance
audits. Citizens’ oversight committees
also would be appointed to help supervise
spending.
FISCAL EFFECTS
Certain Local Bonds More Likely to Pass.
A lower voter approval requirement would
make it easier to pass local general obligation
bonds for housing assistance and public
infrastructure. Recent local election results
suggest that an additional 20 percent to
50 percent of local bond measures would
have passed under Proposition 5’s lower voter
approval requirement. Those measures would
have raised a couple billion dollars over many
years. A lower voter approval requirement
also could mean local governments propose
more measures.
Increased Local Funding for Housing
Assistance and Public Infrastructure. An
increase in the approval of local bonds
could increase funding available for housing
assistance and public infrastructure. The
amount of this increase is not clear. Based
on recent trends, it could be at least a couple
billion dollars over many years. The amount
of the increase would vary across local
governments. If local voters approve more
bonds, local governments also would have
more borrowing costs. These costs would be
paid with higher property taxes. Ultimately,
any future bond approval would depend on
decisions by local governments and voters.
Visit sos.ca.gov/campaign-lobbying/cal-access-
resources/measure-contributions/2024-
ballot-measure-contribution-totals for a list
of committees primarily formed to support or
oppose this measure.
Visit fppc.ca.gov/transparency/
top-contributors.html
to access the committee’s top 10 contributors.
ALLOWS LOCAL BONDS FOR AFFORDABLE HOUSING AND
PUBLIC INFRASTRUCTURE WITH 55% VOTER APPROVAL.
LEGISLATIVE CONSTITUTIONAL AMENDMENT.
PROPOSITION
5 5
5 32 | Arguments Arguments printed on this page are the opinions of the authors and have not been checked for accuracy by any official agency. ★ ARGUMENT IN FAVOR OF PROPOSITION 5 ★
★ REBUTTAL TO ARGUMENT IN FAVOR OF PROPOSITION 5 ★
NO ON PROP. 5: MORE GOVERNMENT DEBT AND HIGHER
PROPERTY TAXES
Politicians claim they need Prop. 5 to make it easier to pass bonds, but they don’t tell you bonds are not free. Bonds are debt. A $20 billion bond costs $30 billion to repay—and it’s paid off with higher property taxes.
NO ON PROP. 5: A TRICK TO USE TAXPAYERS AS A CREDIT
CARD
The politicians in Sacramento turned a $100 billion surplus into a $73 billion deficit in just two years. Now, they want to use local taxpayers as a credit card to keep spending.
They want you to pay for affordable housing and other
“infrastructure” projects with higher property taxes.
NO ON PROP. 5: LOOPHOLES THAT GO BEYOND
“INFRASTRUCTURE”
Politicians say Prop. 5 will build “infrastructure,” but the fine print defines “infrastructure” so broadly that it can include just about anything they want to fund on the backs of local taxpayers.
NO ON PROP. 5: MORE WASTEFUL SPENDING
Politicians say Prop. 5 is needed to build “affordable” housing, but they don’t tell you their version of affordable housing costs as much as $1 million per unit and comes with expensive state mandates.
NO ON PROP. 5: HIGHER TAXES, HIGHER RENTS, HIGHER
PRICES
Since 1879, California has required a 2/3 majority
approval to approve most bonds. Prop. 5 reduces that
threshold—meaning more debt and higher property taxes
for homeowners, higher rents for renters, higher costs to farmers, and higher prices for everything we buy and use.
Don’t trust the politicians. Vote NO on Prop. 5.
Jon Coupal, President
Howard Jarvis Taxpayers Association
Rev. Dwight E. Williams, Chairman
California Senior Alliance
Greg Van Dyke, President
California Consumer Advocates for Affordability and Safety VOTE YES ON PROP. 5
Prop. 5 gives local voters more control over funding
for affordable housing and vital infrastructure projects including roads, bridges, local fire protection and water systems. Without raising taxes, Prop. 5 shifts local public policy decisions and spending priorities away from state government, giving local voters and taxpayers more tools, more power, and greater autonomy to address those issues in their own communities.
PROP. 5: AFFORDABLE HOUSING FOR LOW‑ AND MIDDLE‑
INCOME CALIFORNIANS
We have a massive shortage of affordable housing for low‑ and middle‑income Californians. The high cost of housing consumes too much of our paychecks, and many middle‑
class families are being pushed out of the communities
where they work and where their children go to school.
Prop. 5 gives local communities more tools to make
housing more affordable, including: • Providing first‑time homebuyers’ programs; • Building new housing, including affordable for‑sale ownership and rental housing, for low‑ and middle‑income Californians, seniors, veterans, and
homeless families; and • Renovating and repairing existing affordable housing.
PROP. 5: LOCAL PROJECTS SUPPORTING NEW HOUSING
AND SAFE COMMUNITIES
In addition to affordable housing, Prop. 5 makes it easier for local voters who choose to invest in safety repairs and improvements to bridges, roads, public transportation,
water systems, and other critical public infrastructure as they see fit. Local voters can also approve bonds for emergency preparedness, including local fire stations and engines, ambulances, and early‑warning systems for natural disasters. Prop. 5 trusts local voters to prioritize what’s most important in their communities.
PROP. 5: LOCAL CONTROL. INCREASED ACCOUNTABILITY
Prop. 5 does not raise taxes. It simply gives voters more power to address the unique needs of their communities
without relying on the state, which has not met the
challenges facing most California families.
But with increased control, comes increased accountability, transparency, and oversight to ensure that these programs truly deliver results. To increase protection of local tax dollars, qualifying bond measures have strict accountability requirements including: • A clear list of the specific types of projects to be funded. • All funding must be spent to benefit the jurisdiction that approves the bonds, ensuring that local taxpayers benefit. • Caps on administrative costs so resources are used for the projects local taxpayers voted for. • Independent performance and financial audits of
spending must be posted publicly and reviewed by the State Auditor. • Strict conflict of interest checks for local officials. • Oversight by an independent citizens committee.
For years, local voters have known what challenges their communities face, and how best to address those issues.
Voting Yes on Prop. 5 empowers local voters to make
decisions about what their communities need, and makes
it easier to solve those local problems, with less reliance on state government which has proven to be too slow
and unable to address the critical needs of our individual communities.
Prop. 5 trusts local voters to know what’s best for their own communities when faced with affordable housing shortages and other infrastructure challenges, and gives them the tools to invest in their own local solutions.
Vote Yes on Prop. 5.
Brian K. Rice, President
California Professional Firefighters
Christopher Carson, President
League of Women Voters of California
Leah Miller, Chairperson
Habitat for Humanity California
PROPOSITION ALLOWS LOCAL BONDS FOR AFFORDABLE HOUSING AND PUBLIC INFRASTRUCTURE WITH 55% VOTER APPROVAL.
LEGISLATIVE CONSTITUTIONAL AMENDMENT.5
5 Arguments printed on this page are the opinions of the authors and have not been checked for accuracy by any official agency. Arguments | 33 ★ ARGUMENT AGAINST PROPOSITION 5 ★
★ REBUTTAL TO ARGUMENT AGAINST PROPOSITION 5 ★
YES ON PROP. 5 DOES NOT RAISE TAXES: Prop. 5 simply
shifts local public policy decisions and spending priorities away from state government, giving local voters and
taxpayers more tools and greater autonomy to address
issues in their own communities. Unlike statewide bond
measures, Prop. 5 requires that projects funded by local taxpayers must benefit local taxpayers, and gives more
power to those communities that choose to use Prop. 5 to solve real problems.
PROP. 5 IS NOT A BOND OR A TAX: Prop. 5 finally gives local communities the choice to address critical infrastructure needs if supported by a super‑majority of local voters.
Whether it’s making it easier for first‑time homebuyers, seniors, veterans, and working families to afford housing, or fixing the local roads and bridges that families depend upon for safe travel to and from work and school, Prop. 5 empowers local voters to solve local problems.
PROP. 5 REQUIRES INCREASED ACCOUNTABILITY: For
those communities that choose to utilize Prop. 5, strict taxpayer protections will be mandatory, including: • A list of projects to be funded. • Caps on administrative costs and strict conflict of interest rules. • Independent audits made public, and a trained local citizens oversight committee.
VOTE YES ON PROP. 5: Voters have always known what
challenges their communities face and how best to
address important issues including housing affordability, water systems, road repair, fire stations, and other critical infrastructure needs. Prop. 5 will empower local voters with the choice and the tools to solve those challenges.
Daniel Parra, President
League of California Cities
John Valencia, President
Middle Class Taxpayers Association
Michelle Gutierrez Vo, President
California Nurses Association
NO ON PROP. 5: WRITTEN BY POLITICIANS TO INCREASE
DEBT AND RAISE TAXES
Prop. 5 changes the constitutional requirements that
have existed for 145 years by reducing the voter approval requirements to pass bonds. Prop. 5 makes it easier for cities, counties, and special districts to increase property taxes to pay for our already massive debt levels in California.
Increased debt, combined with skyrocketing interest rates, means HIGHER PROPERTY TAXES ultimately paid for by
every Californian.
NO ON PROP. 5: EVEN MORE UNSUSTAINABLE DEBT
California already has more debt than any other state, with more than $500 billion in state and local debt. When this debt is added to the state’s total unfunded liabilities, it totals a staggering $1.6 TRILLION. Prop. 5 puts taxpayers on the hook for even more—saddling future generations with the bill!
NO ON PROP. 5: HIGHER TAXES, HIGHER RENTS, HIGHER
PRICES
Bonds are not free money. Like a loan, mortgage, or credit card debt, bonds have to be paid back—with interest.
Interest charges turn a $20 billion bond into a $30 billion tax after principal and interest—and TAXPAYERS PAY those costs through higher property taxes.
Higher property taxes mean higher house payments for
homeowners, higher rents for renters, higher costs to
farmers, and higher prices for everything we buy since local businesses will have to pass their higher property taxes on to consumers.
NO ON PROP. 5: SHIFTS STATE BURDEN TO LOCAL
TAXPAYERS
The politicians in Sacramento have made a mess with
their financial mismanagement and wasteful spending,
turning a $100 billion surplus into a $73 billion deficit with unsustainable spending. Prop. 5 allows politicians to cover up their mess by shifting the costs for state programs to local taxpayers. And Prop. 5 was written to define “infrastructure” so broadly that it can include just about anything the
politicians and special interests want to fund on the backs of taxpayers.
PROP. 5: BEWARE THE FINE PRINT
The politicians who wrote Prop. 5 even snuck in a provision buried in the fine print that would make it RETROACTIVE— meaning that any bond passed this November would only
need a lower vote total to pass. Normally, when voters
approve a measure on the ballot, it doesn’t go into law until after the election results are certified. By making Prop. 5 retroactive, they hope to saddle taxpayers with billions in new taxes and debt immediately. That means taxpayers
could see their property taxes skyrocket right away.
NO ON PROP. 5: IT WILL MAKE EVERYTHING MORE
EXPENSIVE
Californians already struggle with the highest cost of living in the nation. We already pay the highest income, sales, and gas taxes in the country, and Prop. 5 will lead to even higher property taxes and higher costs for everyone. Homeowners will be hit with higher taxes, renters with higher rent, and consumers with higher prices on everything from food to gas and utilities to services.
PROP. 5 will make everything more expensive when
Californians can least afford it.
NO on PROP. 5.
Robert Gutierrez, President
California Taxpayers Association
Julian Canete, President
California Hispanic Chambers of Commerce
Kendra Moss, Advisory Member
Women Veterans Alliance
ALLOWS LOCAL BONDS FOR AFFORDABLE HOUSING AND
PUBLIC INFRASTRUCTURE WITH 55% VOTER APPROVAL.
LEGISLATIVE CONSTITUTIONAL AMENDMENT.
PROPOSITION
5