Safe Neighborhood Parks, Clean Water, Clean Air, and Coastal Protection Bond Act of 2000. (The Villaraigosa-Keeley Act)
	Analysis by the Legislative Analyst

Background

In past years the state has purchased, protected, and improved recreational areas (such as parks and beaches), cultural areas (such as historic buildings and museums), and natural areas (such as wilderness, trails, wildlife habitat, and the coast). The state also has given money to local governments for similar purposes. In the past 25 years voters have approved about $1.9 billion of general obligation bonds for these purposes. As of June 1999, all but about $18 million of the bonds authorized by these previous bond acts had been spent or committed to specific projects.

Proposal

This proposition allows the state to sell $2.1 billion of general obligation bonds to spend on acquisition, development, and protection of recreational, cultural, and natural areas. General obligation bonds are backed by the state, meaning that the state is required to pay the principal and interest costs on these bonds. General Fund revenues would be used to pay these costs. These revenues come primarily from the state personal and corporate income taxes and the sales tax.

The bond money would be used as shown in Figure 1. As shown in the figure, about $940 million of the bond money would be granted to local agencies for local recreational, cultural, and natural areas. The remaining $1.16 billion would be used by the state for recreational, cultural, and natural areas of statewide significance.

Fiscal Effect

Bond Costs.

For these bonds, the state would make principal and interest payments from the state's General Fund over a period of about 25 years. If the bonds are sold at an interest rate of 5.5 percent (the current rate for this type of bond), the cost would be about $3.6 billion to pay off both the principal ($2.1 billion) and interest ($1.5 billion). The average payment would be about $144 million per year.

Operational Costs.

The state and local governments that buy or improve property with these bond funds will incur additional costs to operate or manage these properties. These costs may be offset partly by revenues from those properties, such as entrance fees. The net additional costs (statewide) could potentially be in the tens of millions of dollars annually.

Use of Bond Funds Under Proposition 12 (In Millions) Figure 1 Grants to Local Governments and Nonprofit Groups
To fund recreational areas, with grant amount based on population of the local area (such as a city, county, or park district).	$388.0
For recreational areas primarily in urban areas, as follows: Urban areas--$138 million. Large urban areas (cities over 300,000 population and county or park districts over 1,000,000 population)--$28 million. Either urban or rural areas based on need-- $34 million.	200.0
To local agencies for various recreational, cultural, and natural areas.	102.5
For recreational areas, youth centers, and environmental improvement projects benefitting youth in areas of significant poverty.	100.0
For recreational and cultural areas (including zoos and aquariums) in urban areas.	71.5
For farmland protection.	25.0
For soccer and baseball facilities to nonprofit groups that serve disadvantaged youth.	15.0
To San Francisco for improvements at Golden Gate Park.	15.0
For urban forestry programs.	10.0
For playground accessibility improvements using recycled materials.	7.0
To Alameda County for Camp Arroyo.	2.0
For conservation, water recycling, and recreation in Sonoma County.	2.0
For community centers in Galt, Gilroy, and San Benito County.	1.0
For a wild animal rehabilitation center in the San Bernardino Mountains.	1.0
Total, Grants to Local Governments and Nonprofit Groups	$940.0
State Projects
To buy, improve, or renovate recreational areas.	$525.0
To acquire and preserve natural areas.	355.0
To acquire and preserve fish and wildlife habitat.	277.5
To pay the California Conservation Corps for work on projects funded by this proposition.	2.5
Total, State Projects	$1,160.0
Total, All Bond Funds	$2,100.0

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