Pete Stahl has been giving insightful and clever recommendations on ballot propositions since 1980. This year he saved Prop 1A for last, and offered a strong YES on 1A endorsement.
Pete also has some good insights on bonds, gathered from 28 years of watching California government. While the HSR deniers are trying to mislead voters into believing these bonds are going to bankrupt the state, Pete is explaining why they are sensible for long-term infrastructure projects like high speed rail:
"Wait a minute!" I hear you cry. "What about those interest payments? Won't we end up paying more for interest than for the bonds themselves?" This may once have been the case, but with today's low interest rates each dollar of bond money will cost only 30 cents in interest, accounting for inflation. (See details online or on page 8 of your supplemental ballot pamphlet.)
"Okay," you admit, "but loans are still more expensive than pay-as-you-go." This is true. But loans are the only way to buy a house, or a car, or anything else that you need immediately but can't pay for yet. It's worth paying the premium of interest to get the funding now.
This is especially important as the American economy enters a deep recession. We're going to have to raise taxes to balance the state budget, so we can't pay for HSR that way. We desperately need the jobs, the clean and sustainable transportation, the reduction in oil consumption and carbon emissions, if we are to get out of this economic trough. Bonds are going to be costly, but as Pete explains, there's a compelling reason to pay the premium.
Pete also explains how the long-term repayment actually is a good thing:
Remember, too, that California's population continues to grow by hundreds of thousands of people every year. Borrowing makes particular sense if you know your income will go up in the future. As the state grows, the General Fund will certainly grow too.
This is a very good point. In 1998 the General Fund revenues were at $58 billion. In 2008? $102 billion. As California grows, the General Fund will grow too. The bond debt will become easier to repay as a result. This is an oft-overlooked point.
There is one last reason to vote for a bond measure. In addition to being formal requests for permission to take out loans, bond measures are also looked upon as referenda on the merits of the proposed projects. If a bond measure fails, legislators are likely to believe that the public feels the project is not worthy of receiving state funding. By voting no, you may have meant, "Yes on the project but no on the bonds," but your message to Sacramento will read, "No on the project." So if you vote down a bond measure just because you don't like bonds, you may well have killed forever the project the bonds were to have funded.
This is an especially important point given that many HSR deniers claim to support HSR as a concept. If we kill this now, it's not coming back. Federal HSR money will go elsewhere - to Texas, to the Midwest, to Georgia. California politicians will move on to something else as they will take the message that voters don't want HSR.
Which is of course the entire point. That's why they're HSR deniers. The opponents of Prop 1A aren't espousing fiscal responsibility, they're espousing the death of California's high speed rail project, ten years in the making.
Bonds built the Golden Gate Bridge and Shasta Dam during the Depression. They worked for California then and they'll work for us today.