Harkey Introduces Bond Reform Package to Help California Avoid Future Bankruptcy

Proposed Reform Package Will Equip State With Business Tools Necessary To Ensure Long-Term Solvency

SACRAMENTO, CA - Assemblywoman Diane Harkey (R-Dana Point) introduced Assembly Bills 1277 and 1278, a package aimed at improving the way California approaches bond financing and accrual of debt. AB 1277 will establish a management tool allowing the State Treasurer to delay the sale of bonds if the principal and interest payments exceed 6% of the total General Fund revenues for that fiscal year.  AB 1278 will require proper disclosure at the ballot box of true costs associated with the approval of bond initiatives fully disclosing to Californians how new debt will impact their pocket book long term.

"Ballots should disclose the true costs of proposed bonds in simple, easy-to-read text instead of deceiving the voters with catchy ballot titles and pages of legal jargon," said Assemblywoman Harkey. "Every Californian has the right to know the real impact of debt approved by the voters - they are tired of being deceived."

"The state should be able to manage its borrowing similar to a business. I was shocked to find there were no measures in place to control the amount of debt the state saddles on future generations. Since the State treasurer has the fiduciary responsibility to keep the State solvent, we should provide the tools. We should not have to wait for the investment community to cut us off."

Assemblywoman Harkey represents the 73rd Assembly District in the California Legislature, which includes Orange and San Diego counties.