Saturday, May 13, 2023

#133 / A Look Out Lesson


The Mayor of Santa Cruz, Fred Keeley, is pictured above. The picture comes from a story in Lookout Santa Cruz, an online magazine that covers Santa Cruz County news. The Lookout article from which the picture was obtained is headlined, "Santa Cruz Mayor Fred Keeley will leave it to residents to figure out 2024 affordable housing bond." Be aware that a ferocious paywall may well prevent non-subscribers from reading the article in full, though please give that link a click and see what you find!
For those who have been paying attention, it is no surprise that Mayor Keeley is deeply engaged in discussions about whether or not the city should place an affordable housing bond measure on the ballot next year. Keeley has long been a proponent of just such a bond measure, and in fact campaigned for Mayor on that basis. 
A "bond measure," as most of those reading this blog posting probably know, is a measure that, if passed by the voters, would authorize the city to borrow money (which means to incur debt) to be used for the purposes specified in the bond measure. The question for the voters would be whether or not the city should extend its fiscal borrowing power to raise money to be used for future affordable housing developments (and how, specifically, the borrowed money would be used).

What might seem surprising in the Lookout headline (for those who know Mayor Keeley and know about his commitment to an affordable housing bond), is the idea that the Mayor thinks it should be up to "residents" whether or not such a bond issue should be placed on the ballot next year - and what such a bond issue should contain. Mayor Keeley specifically campaigned for Mayor as someone who wanted to see such a bond measure placed on the ballot. Has Mayor Keeley become less committed? What's going on?

If you can penetrate the Lookout paywall, and read the entire article, the mystery of the headline is solved. The Mayor has learned that if he and the City Council vote to put a bond measure on the ballot themselves, such a measure will only pass if there is a two-thirds affirmative vote by the voters. On the other hand, if "residents" place the measure on the ballot, by collecting enough signatures to qualify an initiative measure, then only fifty percent of the voters, plus one, will have to vote "yes" in order to put city taxpayers on the hook for whatever borrowing is specified. 

Because borrowing money with a bond issue pledges that future city revenues will be spent to pay back those who loaned the city money for the activities specified in the bond measure, passing a bond issue potentially deprives the city of its ability to meet other needs in the future. In other words, there is a serious tradeoff involved. That is the reason that state law requires a greater than simple majority vote to make such a commitment - a 2/3 vote, in fact. State law is intended to make sure that city voters really want to make the commitment, since borrowing money for specific purposes, as defined in the bond measure, can lead to real fiscal problems down the road. If tax revenues fall, or if there are new and unanticipated challenges, the city may not have the fiscal flexibility that it otherwise would have had. 

Using an initiative measure to place a bond issue on the ballot makes it much easier to pass. That is what leaving it to "residents" does, and I am betting that this, not a reduced commitment to the bond measure, is what has motivated the Mayor's recent statement to Lookout. The Santa Cruz Sentinel, by the way, has also covered this story, in its Thursday, May 11th issue. The Sentinel also makes clear that having "residents" sponsor an initiative measure can eliminate the need for a two-thirds vote.

There are few issues that have a higher priority for city voters than producing more affordable housing. Still, it is important for voters to know what is really going on. If the Mayor and City Council don't take official action, themselves, to place an affordable housing bond measure on the ballot, but seek to facilitate a ballot measure by "residents" (which will certainly include those developers and builders who will get a good share of the bond money if the bond measure is approved), the main motivation for handling the bond measure in that way will not be a desire to "let the residents decide." The main reason will be to make it easier to get an authorization for city borrowing with a lesser affirmative vote than would otherwise be required under state law.
Image Credit:

No comments:

Post a Comment

Thanks for your comment!