We're therefore disappointed to learn of two recent policy developments in the City of Berkeley and the State of California which are headed in the wrong direction.
First in Berkeley, the Budget and Finance Committee has proposed what we will refer to as a “Bonds Forever” policy. Council has asked the City Manager to draft a comprehensive fiscal policy that institutionalizes a regular, predictable schedule for issuing general obligation bonds. The Committee has pointed to the failed Measure L from 2022 as a model for this approach.
As we detailed in a recent report, Measure L would have authorized $650 million in new borrowing. The cost to repay that debt would have exceeded $1.2 billion over 48 years—effectively passing today’s financial burdens onto future generations. Beyond the staggering repayment cost, the bond would have been funded through a property tax based on assessed value (see Alameda County Parcel Viewer). As a result, two households living in nearly identical homes on the same street could be taxed at dramatically different levels, with one paying up to ten times more than the other. We’ll explore the inequities of assessed value-based bond financing in a future post.
The Council states that this proposal will create “predictable financial planning horizons” to address the city’s infrastructure backlog. However, this reasoning prioritizes borrowing while the structural causes of our ongoing budget deficits persist. Absent a stable and sustainable fiscal environment, taking on additional debt is premature.
Compounding this issue, the California State Legislature is backing a proposal to remove cost disclosures from ballot summaries. In other words, voters could be asked to approve large-scale borrowing, without being informed of the financial implications in the summary language on their ballots.
CalMatters reports:
[Historically] the bill’s sponsors wanted to revive the old practice of using the 75-word summary to extol the virtues of proposed tax and bond measures, discarding the requirement that it be a “true and impartial synopsis.”
“The new bill is sponsored by advocates of low-income housing who believe that housing bonds would be easier to pass if their property tax increases were less evident, but the effects of AB 699’s enactment would apply to all bond issues, not just those for housing.”
At a time when we desperately need leadership that engages the public with practical, forward-thinking strategies to build a sustainable, equitable, and resilient financial future, our elected local and state officials appear to be doubling down on issuing debt, while obscuring the cost. Unfortunately, this only reinforces the growing narrative of dysfunction in progressive governance.
Contact Assembly Member Wicks:
assemblymember.wicks@assembly.ca.gov
Dear Assemblymember Wicks,
As one of your constituents, I was deeply disappointed by your “Yes” vote on AB 699 (Local Measure Tax Rate Disclosure).
The current law strikes a reasonable balance, by ensuring voters receive impartial information about the costs and benefits of proposed local tax measures. By deliberately concealing the true cost of these measures from voters, AB 699 undermines that transparency.
As an elected official who publicly champions transparency, your support for this bill is both troubling and inconsistent with the values you claim to uphold. As Dan Borenstein of the Mercury News points out, it is not difficult to explain the costs and benefits to voters. An example he cites is a Fremont bond measure for schools.