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Quake Bonds on June Ballot

March 18, 1994

The Times' proposal for financing the state's share of earthquake recovery costs (editorial, March 9) fails to provide a workable alternative to Gov. Pete Wilson's proposal. First in its problems is the suggestion that the state somehow tap into the Pooled Money Investment Account to allocate a line of credit for earthquake repair work. Loans from this account cannot be made unless there is an existing bond authorization, and no bond authorization has been approved for such purposes.

As for the criticism that "bureaucrats" are the reason that previously authorized earthquake bond monies have not been spent, many of those "bureaucrats" are in fact seismic engineers. The 1990 earthquake bond measure required each and every state and local government building throughout California to be examined for seismic safety, a process that understandably took several years to complete. Those buildings have been prioritized based on their need of repair, and the priority lists are or will shortly be submitted to the Legislature.

The Times also takes issue with the Administration's proposal to finance $65 million in hazard mitigation costs through a new bond authorization. The reason for this approach is simple: Tapping into the 1990 bond funds will only serve to put off and push back needed seismic retrofit work on a number of buildings around the state.

The Times suggests that the state take several actions the same way it did after the Loma Prieta earthquake, some using new sales tax money. But California's economy today is worlds apart from what it was in late 1989. On the issue of bonds, there's a difference today that's compelling: The weighted average interest on GO bonds in late 1989 was 6.84%. Today, it's 5.23%--it is more economical for the state to go the bond route.


Director, Department of Finance


In a March 12 editorial, you argue that Californians should not pay for post-Northridge-quake reconstruction by means of bond issues because "in the long run they cost more than equivalent taxes." Right. But you support a "temporary sales tax increase" or a "modest gasoline tax hike" instead. Wrong. It is a symptom of the degeneration of political discourse in California (and across the United States generally) that you neglected to mention the fairest and most equitable solution: a temporary hike in the state income tax.

Elementary facts of political economy show that the burden of a sales tax falls disproportionately on the poor and that a hike in the gasoline tax is unfair to truck drivers and long-distance commuters. What makes these taxes attractive to politicians is that their effects are virtually invisible to the majority of voters. But invisible injustice is still injustice, and its very invisibility makes it all the more important for decent citizens to oppose it.


Los Angeles

The editorial supporting a new tax to pay for rebuilding earthquake-damaged public structures characterizes the sales tax imposed after the Loma Prieta earthquake as a "modest and temporary" tax increase. If the tax increase was temporary, why are we still paying it? Remember the rationale to support making the tax permanent in November? "It's not a new tax."

If a new tax is imposed now, we can be certain that two or three years from now the tax will be made permanent. There is no such thing as a temporary tax.


Costa Mesa

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