THE QUESTION Should the state borrow $50 million through the sale of general obligation bonds to construct and renovate state-owned veterans' homes? PROVISIONS Proposition 16 would authorize California to borrow $50 million through the sale of general obligation bonds for construction of new veterans' homes and renovation of existing veterans' homes:
BACKGROUND The states own and operate state veterans' homes. The federal government also provides funding. State veterans' homes care for elderly and disabled veterans living in the state. In 43 states, a total of 95 veterans' homes provide 5,891 independent living beds, and 90 nursing homes provide 17,794 nursing-care beds. The U.S. Department of Veterans Affairs established the state veterans' home program in 1888 to provide federal aid to state veterans' homes. These homes care for elderly and disabled veterans who cannot earn a living. Federal aid to the states consists of funding up to 65% of construction costs as well as per diem payments for nursing home and hospital care. Over three million veterans currently live in California. The need for care is expected to increase. The Department of Veterans Affairs says the need exists now for 7,000 nursing care and 5,600 independent living beds. In 1884, the state established a veterans' home in Yountville (Napa County) which has beds for 1421 veterans. This veterans' home is undergoing significant renovations. When renovations are complete, Yountville will care for 1600 veterans. About $20 million is required for the next five-year plan for projects at Yountville. The Yountville veterans' home has independent living and five levels of nursing care for veterans 62 years and older or disabled. In 1996, a second veterans' home opened in Barstow (San Bernardino County), which can care for 400 veterans. Barstow Community College donated the 22 acres for this site. This veterans' home has 220 beds for independent living and 180 beds for two levels of nursing care. A third veterans' home is under construction in Chula Vista (San Diego County) and will care for 400 veterans. In 1997, Chula Vista donated 25 acres for this veterans' home, next to Sharp-Chula Vista Community Hospital. Construction began in spring 1998 and the home will be ready for occupancy in April 2000. This veterans' home will have 165 beds for independent living, 55 beds for assisted living and 180 beds for nursing care. The state has authorized two additional veterans' homes, planned in Lancaster (Los Angeles County) and Saticoy (Ventura County). In 1997, Lancaster proposed a site of 23 acres for the veterans' home. Construction is expected to start in spring 2001 and conclude in spring 2003. Two additional veterans' homes may also be needed within the next ten years. An additional veterans' home, preferably located near a university hospital, was recommended for veterans with Alzheimer's disease or dementia. Current policy excludes veterans with Alzheimer's disease or other types of dementia. It is the legislature's intent to include them and to plan a new veterans' home for them. Only after the veterans' home in Chula Vista is completed, opened, fully operational, and need is demonstrated for an additional site, would the next site be constructed. The bonds would provide funds first for those veterans' homes that have already been planned. Any remaining funds would be used for renovation at Yountville and for additional new homes. Twenty-four million dollars of this $50 million bond act would replace current lease-payment bonds for planned renovation and construction of state veterans' homes, which would reduce the interest rate. Thirty-six million dollars of lease-payment bonds have been authorized and are currently being used for construction at Chula Vista, with over $24 million not used but planned for the two additional veterans' homes. Funding for the repairs at Yountville over the past 15 years has come from the state's General Fund through budget acts. Funding for the construction at Chula Vista, and for planned construction at Lancaster and Saticoy, has come from lease-payment bonds. A goal of 3% of the construction contracts would be awarded to disabled veterans. Related legislation in AB 193 (Cardoza), signed by the Governor in October, creates a twelve-member commission to advise the Governor and Legislature about planning and construction of these additional veterans' homes. FISCAL EFFECT According to the Legislative Analyst, the total estimated state cost would be $33 million over 25 years. Payments would be about $1 million per year. $24 million of the $50 million general obligation bonds would replace currently authorized lease-payment bonds, which are more expensive to finance than general obligation bonds. Cost to operate local facilities: The state will incur additional cost for daily care for veterans residing in the newly constructed veterans' homes. In state veterans' homes, current daily rates per person are $19.52 for independent living, and $43.92 for nursing home care. The federal government provides funds for about 28-33% of this cost. IMPACT OF YES OR NO VOTE A YES vote means the state could issue $50 million in general obligation bonds to construct and renovate state-owned veterans' homes, with $24 million replacing current lease-payment bonds. A NO vote means the state would not be able to issue new general obligation bonds to construct and renovate state-owned veterans' homes, and the current authorization of lease-payment bonds would not be changed. SUPPORTERS SAY
OPPONENTS SAY
SUPPORT AND OPPOSITION The official ballot arguments in support are signed by Gray Davis, Governor of California; John McCain, U.S. Senator, Arizona; Joe Dunn, State Senator; Willy Wilkin, California State Commander of the American Legion; Richard Eubank, California State Commander of Veterans of Foreign Wars; and Georges Robin, California Legislative Officer, Military Order of the Purple Heart. Other supporters mentioned in the ballot argument include the American Association of Retired Persons. The official ballot arguments in opposition are signed by Gail K. Lightfoot, Past Chair, Libertarian Party of California; Larry Hines, U.S. Marine Corps veteran; and Ted Brown, Insurance Adjuster/Investigator. For more information: Supporters: Senator Joe Dunn, Friends of California Veterans, 916-441-4759, email prop16@vetbond.com, www.vetbond.com Opponents: Ted Brown, Libertarian Party of California, 626-614-0630, email tebrown@earthlink.net, www.ca.lp.org
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