What is California’s Proposition 5 on votes for bond measures?

SAN DIEGO ( FOX 5/KUSI ) — Nearly every election cycle, Californians vote on a number of measures to allow local governments to borrow money in the form of bonds. Under state law, however, it is quite hard for these measures to actually pass.

That could change in November with one of the dozen statewide propositions on the ballot, Proposition 5.

While more technical than some of the other propositions on this year’s ballot, supporters of the proposition say it could be critical to fund construction of desperately needed affordable housing and other public infrastructure. Here’s what to know about the ballot measure.

What is Proposition 5?

In California, most local ballot measures to take out bonds require support from two-thirds of voters — or roughly 66.67% — to pass. This voter-approval requirement dates back to the late 1800s and was reinforced by Proposition 13 in 1978.

This has proven to be an exceptionally hard standard for local governments to meet in order to borrow money in the decades since.

A San Diego measure back in 2020 asking to borrow $900 million to expand permanent and supportive housing failed with 58% of voters voting in favor of it. In 2022, a $400 million bond for transit repairs in San Francisco failed with 65% of voters in support.

Back in the early 2000s, this obstacle prompted California voters to approve a constitutional amendment removing the two-thirds requirement for school improvement-related bond measures, setting it at 55% instead.

Prop 5 would do the same for local measures tied to affordable housing and public infrastructure projects, such as road repair, transit improvements and emergency response and preparedness upgrades.

If Prop 5 passes in November, the lower approval threshold would apply for all housing and infrastructure-related bonds on the ballot this year, as well as any future ones.

Why is Proposition 5 on the ballot?

Prop 5 was placed on the ballot through the state legislature after years of legislators pushing for the amendment. Assemblymember Cecilia Aguiar-Curry (D-Winters), who spearheaded this effort, eventually got it approved by the legislature last fall.

The original version of the amendment also included certain tax hikes, but this was removed by state lawmakers earlier this year.

The legislature similarly added language to the new version that would bar local governments from buying single-family homes to covert into affordable housing in order to keep the California Association of Realtors from opposing the measure.

Arguments for Proposition 5

Supporters of the measure argue the current standard requiring a supermajority to pass local bond measures is undemocratic, as it in practice allows a fraction of voters to overrule the majority.

They also say passage of the proposition would reduce local governments’ dependence on state or federal spending to address issues facing their community by giving them — and their residents — more control to fund critical projects.

“By giving our communities more power to choose how to address their unique needs, Prop 5 shifts decisions about public policy and spending priorities away from state government and into the hands of local voters and taxpayers,” the committee for Prop 5 wrote on its website.

A number of organizations have endorsed Prop 5 like Habitat for Humanity, California Professional Firefighters, California Teachers Association, Middle Class Taxpayers Association, AARP California and California YIMBY. It is also backed by the California Democratic Party.

Campaign finance disclosures show the main committee for the measure has received about $5.33 million in contributions, including two $2.5 million donations — one from Mark Zuckerberg’s family foundation and another from the Non-Profit Housing Association of Northern California.

Arguments against Proposition 5

Opponents of Prop 5 argue making it easier for cities to borrow money in the form of bonds is not necessarily a good thing, as they would have to be paid back at some point. Local governments largely pay these debts back through property taxes.

More borrowing with the lower threshold for these measures to pass could result in higher property taxes for property owners, detractors say. The increased property costs could then be transferred on to the broader electorate.

“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,” the opposition statement reads.

The California Chamber of Commerce, Howard Jarvis Taxpayers Association, National Federation of Independent Businesses and California School Boards Association have publicly opposed Prop 5. The California Republican Party has also endorsed voting against it.

The “No on Proposition 5” committee was terminated in August, campaign finance disclosures show , meaning it is no longer actively spending money in the race. However, the Howard Jarvis Taxpayers Association is still campaigning against it and has about $733,977 on hand.

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