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LEAGUE OF WOMEN VOTERS OF CALIFORNIA EDUCATION FUND	Nonpartisan Pros & Cons of PROPOSITION 32 VETERANS' BOND ACT OF 2000.
	Legislative Bond Act

THE QUESTION

Should the state borrow $500 million through the sale of general obligation bonds to replenish Cal-Vet funding for long term farm and home loans made to California veterans?

THE SITUATION

Since 1922, the state has helped veterans finance homes and farms with long term, low interest loans. About 400,000 veterans have been able to purchase property through this program. California voters have approved all 25 of the past measures to renew the bonds and continue funding for Cal-Vet loans.

THE PROPOSAL

This measure would replace general obligation bonds that have been repaid to the public. The money is to be used solely to help California veterans purchase homes, mobile homes and farms. The bonds will not be issued until present funds are depleted, which is expected to occur in 2002.

FISCAL EFFECT

According to the Legislative Analyst, the Cal-Vet lending program is self-supporting, with the mortgage payments by veterans paying off the bond debt. It is necessary to renew the bonds as they are paid off to investors so that the state has continued funds to draw upon.

SUPPORTERS SAY

• The Cal-Vet loan program helps veterans invest in homes and farms in California, at no expense to the taxpayer.
  
  
• Both the Senate and the Assembly approved this measure unanimously.
  

• Money raised from the sale of tax-free bonds could be spent on taxable investments, bringing money into the state treasuries.
  
  
• These loans should be available only to those disabled in military combat.
  

Analysis prepared by the League of Women Voters of California Education Fund
for the November 7, 2000 Election.