California Proposition 2, Use Millionaire's Tax Revenue for Homelessness Prevention Housing Bonds Measure (2018)
California Proposition 2, the Use Millionaire's Tax Revenue for Homelessness Prevention Housing Bonds Measure, is on the ballot in California as a legislatively referred state statute on November 6, 2018.
Why is Proposition 2 on the ballot?
The California State Legislature passed legislation to spend revenue from Proposition 63 on revenue bonds for homelessness prevention housing in 2016. The legislation, however, did not go into effect because of pending litigation over whether revenue from the millionaire's tax could be spent on homelessness prevention housing. Unlike general obligation bonds, revenue bonds do not require a public vote in California. Proposition 2 was referred to the ballot because the revenue for the bond would come from a tax that was created through a ballot initiative, Proposition 63. In California, changes to ballot initiatives require a vote of the public.
What other ballot propositions address housing in California?
Voters in California will decide four ballot propositions related to housing on November 6, 2018—the most ever to appear on a state's ballot in one year according to Ballotpedia’s catalog of housing-related ballot measures. Besides Proposition 2, voters will decide the following three housing-related ballot propositions:
- Proposition 1 would authorize $4 billion in bonds for affordable housing programs, loans, grants, as well as housing loans for veterans.
- Proposition 5 would remove restrictions on allowing seniors (ages 55+) and persons with serve disabilities to transfer their tax assessments, with a possible adjustment, from their prior home to their new home.
- Proposition 10 would allow local governments to adopt rent control.
Supporters of Propositions 1, 2, 5, and 10 all argue that their ballot measures would help address the housing situation, such as rent prices, real estate values, and available housing, in California.
Bonds on the ballot in California
In California, the state sells general obligation bonds to investors, who are in effect providing funds to the state that the state repays the investors with interest over a period of time. The state repays bondholders through revenue in the General Fund. The California Constitution requires that general obligation bond issues of $300,000 or more be referred to voters for approval or rejection. Between 1993 and 2018, voters of California cast ballots on 39 bond issues, approving 31 of them.
“Authorizes Bonds to Fund Existing Housing Program for Individuals With Mental Illness. Legislative Statute.”
Text of the measure
The official ballot summary is as follows:
- Ratifies existing law establishing the No Place Like Home Program, which finances permanent housing for individuals with mental illness who are homeless or at risk for chronic homelessness, as being consistent with the Mental Health Services Act approved by the electorate.
- Ratifies issuance of up to $2 billion in previously authorized bonds to finance the No Place Like Home Program
- Amends the Mental Health Services Act to authorize transfers of up to $140 million annually from the existing Mental Health Services Fund to the No Place Like Home Program, with no increase in taxes.