THE QUESTION Should the state borrow $500 million ($500,000,000) through the sale of general obligation bonds to replenish California Veterans (Cal-Vet) funding for long-term farm and home loans made to California veterans? PROVISIONS This measure would replace general obligation funds which have been repaid to the public. This money is to be used solely to help veterans purchase property. BACKGROUND At the end of World War I, the California Legislature approved the California Farm, Home and Mobile Home Purchase Assistance Program, which assists veterans in the purchase of property. Voters have approved all 25 bond measures since 1922 to fund this program. More than 400,000 veterans have been helped. The money is used to purchase farms, homes, and mobile homes by veterans who repay the state in monthly payments, including interest. Any veteran living in California is eligible. General obligation bonds are offered to the public and, over the life of the bond, the money is paid back to the bond investors. Mortgage payments by veterans offset the bond debt. The last replenishment of funds was in November 1996, and it is projected that the last of the bonds will be sold by the summer of 2002, depleting the fund. FISCAL EFFECT According to the Legislative Analyst, the Cal-Vet program has always been self-supporting, the costs having been repaid by the veterans. If, however, the payments of the veterans were not sufficient to cover the amount of the bonds, the taxpayers would be required to make up the difference. The bonds will not be sold until the existing funds in the program are used up, probably in 2002. The bonds, paid off over 25 years and at an interest of 5.5 percent, would amount to about $858 million ($500 million in principal and $358 million in interest). IMPACT OF YES OR NO VOTE A YES vote means that the state could sell $500 million in bonds to refinance the Cal-Vet program. A NO vote means that the state could not sell these bonds. SUPPORTERS SAY
OPPONENTS SAY
SUPPORT AND OPPOSITION The official ballot arguments in support are signed by Assemblyman John A. Dutra, Chair, Assembly Committee on Veterans Affairs and Senator K. Maurice Johannessen, Chair, Senate Committee on Veterans Affairs. The official ballot arguments in opposition are signed by Melvin Emerich and Gary B. Wesley, Cochairmen, Voter Information Alliance. For more information: Supporters: Assemblyman Glenn Gilbert, Assembly Committee on Veterans Affairs; (916) 319-2486; email: glenn.gilbert@asm.ca.gov Opponents: Melvin L. Emerich, Attorney at Law; (408) 995-3224; website: www.melemerich.com
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