This is an archive of a past election.
See for current information.
LWV League of Women Voters of California Education Fund
Smart Voter
State of California March 2, 2004 Election
Proposition 57
The Economic Recovery Bond Act
State of California

Bond Act, put on the Ballot by the Legislature - Majority Approval Required

3,991,044 / 63.3% Yes votes ...... 2,312,254 / 36.7% No votes

See Also: Index of all Propositions

Results as of Mar 26 4:14pm, 100.0% of Precincts Reporting (21830/21830)
Information shown below: Summary | Fiscal Impact | Yes/No Meaning | Impartial Analysis | Arguments | Full Text

Should the state of California borrow 15 billion dollars ($15,000,000,000) through the sale of bonds to provide financing for California's budget deficit?

Summary Prepared by the State Attorney General:
A one time Economic Recovery Bond of up to fifteen billion dollars ($15,000,000,000) to pay off the state's accumulated General Fund deficit as of June 30, 2004.

The Economic Recovery Bond will only be issued if the California Balanced Budget Act (Proposition 58) is also approved by the voters.

The bonds will be secured by existing tax revenues and by other revenues that could be deposited in a special fund.

Fiscal Impact from the Legislative Analyst:
The $15 billion bond measure would replace the $10.7 billion deficit-financing bonds authorized by the Legislature in 2003.

Near-Term Savings: The increased amount would provide the state additional one-time funds to address its budget shortfall. The state would also realize near-term savings related to debt service on the $15 billion bond measure. This is because the payments would be based on one-quarter cent of annual sales taxes instead of one-half cent. As a result, annual General Fund costs would be one-half of the currently authorized bond for the next few years.

Longer-Term Costs: The near-term savings would be offset by higher costs in the longer term. This is because the proposed bond would be larger ($15 billion versus $10.7 billion) and it would take longer to repay, specifically between 9 and 14 years, compared to a 5-year period for the currently authorized bond.

Meaning of Voting Yes/No
A YES vote of this measure means:
A YES vote on this measure means: The state would sell $15 billion in bonds to pay existing budgetary obligations.

A NO vote of this measure means:
A NO vote on this measure means: The state would not sell $15 billion in bonds, but could instead sell bonds previously authorized by the Legislature to pay a smaller level of existing budgetary obligations.

Impartial Analysis from the Legislative Analyst
(coming later)

  Official Information

Secretary of State

Legislative Analysts's Office Nonpartisan Information

League of Women Voters - Analysis

League of Women Voters - Background California Budget Project Events

LWV Pros & Cons Public Meetings

  • Come to a meeting in your community where League experts discuss all state ballot propositions giving a nonpartisan analysis. Consult your Smart Voter county page for dates, times and locations.
News and Analysis

KQED San Francisco 88.5FM

The Sacramento Bee Partisan Information


Suggest a link related to Proposition 57
Links to sources outside of Smart Voter are provided for information only and do not imply endorsement.

Arguments For Proposition 57 Arguments Against Proposition 57
Proposition 57 will keep the state from running out of money and prevent drastic cuts in spending on vital programs like education and health care.

Proposition 57 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.

Without the Proposition 57 bonds, the State of California may be out of cash by June 2004. If so, the only choices will be to drastically increase taxes. These bonds will let us refinance our inherited debt and give the state time to deal with its ongoing structural deficit.

Proposition 57, and the California Balanced Budget Act, Proposition 58, together will give California's leaders the tools necessary to restore confidence in the fiscal management of the State.

Proposition 57 plunges us $15 billion deeper in debt, plus billions more in interest. Total debt service from Proposition 57 will cost an average family more than $2,000.

This will not buy a single school, road or park, nor will it 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.

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 proposition on the ballot, these same politicians also propose to void this historic constitutional requirement by asking the voters to pass Proposition 58, cynically named "The California Balanced Budget Act."

Full Text of Proposition 57
For the full text of this measure, please go to page 18 in

California Home Page || Statewide Links || About Smart Voter || Feedback
Created: May 4, 2004 14:48 PDT
Smart Voter <>
Copyright © League of Women Voters of California Education Fund
The League of Women Voters neither supports nor opposes candidates for public office or political parties.