ARGUMENT in Favor of
Proposition 57
State government spending in California is out of control. Over the past three years, state spending has significantly exceeded state revenues.
The California Economic Recovery Bond Act will consolidate the deficit and ALLOW CALIFORNIA TO GET ITS FINANCIAL HOUSE IN ORDER—WITHOUT RAISING TAXES.
The California Economic Recovery Bond Act will keep the state from running out of money and prevent drastic cuts in spending on vital programs like education and health care.
The California Economic Recovery Bond Act will not take effect unless voters approve the California Balanced Budget Act, which PROHIBITS BORROWING TO PAY DEFICITS ever again and requires enactment of a BALANCED BUDGET.
The California Balanced Budget Act also provides for a fund of up to $5 billion that can be used to PAY THESE BONDS OFF EARLY. It also provides for a RESERVE of at least $8 billion, which can be used to PREVENT FUTURE DEFICITS.
Last year, the state approved $12.9 billion in bonds to retire the accumulated budget deficit. The courts have declared one bond issuance unconstitutional and the other is subject to legal challenge because they were not approved by voters. Since then, the state has
accumulated a larger budget deficit. PROPOSITION 57 WILL LEGALLY RESTRUCTURE AND REFINANCE THAT DEBT WITH THE APPROVAL OF THE VOTERS.
Without this bond, the State of California may be out of cash by June. To deal with a calamity of that magnitude in such a short time frame, the only choice will be to drastically increase taxes. The California Economic Recovery Bond will let us refinance our inherited debt and give the state time to deal with its ongoing structural deficit.
The California Recovery Bond and the California Balanced Budget Act, Proposition 58, together will give California's leaders the tools necessary to restore confidence in the financial management of the State.
Please join Superintendent of Public Instruction Jack O'Connell, the California Taxpayers' Association, State Controller Steve Westly, the California Chamber of Commerce and Governor Arnold Schwarzenegger in supporting Proposition 57. It is the only way to ensure California's financial future.
ARNOLD SCHWARZENEGGER, Governor
State of California
LARRY MCCARTHY, President
California Taxpayers' Association
ALLAN ZAREMBERG, President
California Chamber of Commerce
REBUTTAL to Argument in Favor of Proposition 57
Proponents contradict themselves. They say that spending is out of control, but at the same time say they don't want to cut it.
So their answer is to borrow an unprecedented $15 billion—plus interest—and keep right on spending. That's more than $2,000 for every family in California.
If state spending were reduced 13.4 percent from its current rate, the entire deficit would be cured in 18 months. And that's still 15 percent more than we spent when Gray Davis became governor.
Proponents say this won't raise taxes. Where do they think the money is going to come from to pay back $15 billion in loans plus billions more in interest? Ultimately, it must come from either cuts that proponents have already said they don't want to make—or from increased taxes.
Propositions 57 and 58 do nothing to reduce the state's out-of-control spending that ballooned the state budget from $57.8 billion five years ago to a projected $90.2 billion next year. They allow politics to continue as usual in Sacramento: spend, borrow and tax.
SENATOR TOM McLINTOCK
SENATOR BILL MORROW
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ARGUMENT Against
Proposition 57
California is billions of dollars in debt. Out-of-control borrowing has already cost California the lowest credit rating in the nation—on a par with many Third World countries.
Prop. 57 plunges us $15 billion DEEPER IN DEBT—plus billions more in interest. Total debt service from Prop. 57 will cost an average family more than $2,000.
What does it buy? NOTHING. This doesn't buy a single school, road or park. It doesn't put a single cop on the street or relieve any traffic congestion. It simply papers over the gigantic deficit that Sacramento's politicians created in the first place.
Instead of cutting the waste from government bureaucracy and targeting fraud for elimination, they have decided to use the biggest bond in California history to cover their spending addiction.
Since 1849, California's Constitution has forbidden bonds like this from being used to paper over deficit spending. Long-term bonds are supposed to be used for schools, parks, highways and water projects that will serve coming generations. In order to put this unprecedented borrowing on the ballot, the same politicians also propose repealing this historic constitutional amendment—and have the audacity to call it "balanced budget amendment."
Five years ago California spent $57.8 billion from its General Fund. Next year, it will spend $90.2 billion.
Instead of adding more than a billion dollars of additional debt service to the state budget every year for the life of this bond, we need to suspend the state's spending mandates and restore the power that the Governor had from 1939 to 1983 to make mid-year spending reductions.
The October 7th election sent Sacramento an important message: NO NEW TAXES.
A NO vote on Prop. 57 sends them another: STOP BORROWING, STOP OVERSPENDING, and PUT OUR FINANCES BACK IN ORDER!!!
SENATOR TOM McCLINTOCK
SENATOR BILL MORROW
REBUTTAL to Argument Against Proposition 57
The California Legislature has already approved $12.9 billion in bonds to retire the accumulated budget deficit. The California Economic Recovery Bond Act gives the voters the power to APPROVE A SOUND RESTRUCTURING PLAN for California.
Governor Arnold Schwarzenegger has proposed the California Economic Recovery Plan to ALLOW CALIFORNIA TO GET ITS FINANCIAL HOUSE IN ORDER—WITHOUT RAISING TAXES. Without the California Economic Recovery Bond Act, the state could run out of money, leaving no choice but drastic cuts in spending on vital programs like education and health care or a huge tax increase. Proposition 57 will let us refinance our inherited debt and give the state time to deal with its ongoing structural deficit.
Remember, the California Economic Recovery Bond Act will not take effect unless voters approve the California Balanced Budget Act. Don't be misled by the opposition, the California Balanced Budget Act will PROHIBIT BORROWING TO PAY DEFICITS ever again and will require enactment of a BALANCED BUDGET.
Governor Schwarzenegger needs both Propositions 57 and 58 to pass. It will give him the tools necessary STOP BORROWING, STOP OVERSPENDING, and PUT OUR FINANCES BACK IN ORDER.
Please join Superintendent of Public Instruction Jack O'Connell, the California Taxpayers' Association, State Controller Steve Westly and the California Chamber of Commerce and VOTE "YES" on Proposition 57. It is the only way to ensure California's financial future.
ARNOLD SCHWARZENEGGER, Governor
State of California
LARRY MCARTHY, President
California Taxpayers' Association
CARL GUARDINO, President
Silicon Valley Manufacturing Group |
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