California voters rally behind bond measures

Wed Nov 5, 2008 6:53pm EST
 
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SAN FRANCISCO (Reuters) - California voters passed three of four bond measures on their state ballot, including nearly $10 billion to launch a statewide high-speed train system, and a slew of local debt measures, including $7 billion for Los Angeles schools.

Voters in the most populous U.S. state, also the biggest issuer of U.S. municipal bonds, on Tuesday defied analysts who saw its flagging economy as potentially giving pause to take on more debt, according to election results posted on Wednesday.

The results come as Republican Gov. Arnold Schwarzenegger prepares to call the state's Democrat-led legislature into a special session to address a reopened state budget shortfall as revenues sag. He also plans to present an economic stimulus plan to lawmakers, according to aides.

Meanwhile, State Treasurer Bill Lockyer is preparing to sell $2 billion in revenue anticipation notes later this month to raise short-term cash for the state. Last month he sold $5 billion of the notes.

Voters elected to add to Lockyer's future debt sales.

Proposition 1A, which sought $9.95 billion in state general obligation debt to begin work on high-speed rail network that analysts expect to eventually cost $40 billion, won 52 percent of votes.

Proposition 3, which asked voters for $980 million in general obligation debt form construction projects for children's hospitals, and Proposition 12, which sought $900 million in g.o. debt for veterans' programs, likewise both won a majority of votes.

By contrast, voters rejected Proposition 10, which sought $5 billion in state g.o. bonds for renewable energy, alternative fuel and air emissions reduction projects, and for subsidies to consumers to buy certain high fuel economy or alternative fuel vehicles, including natural gas vehicles.

At the county level, voters rallied behind bond measures for public schools and community colleges.   Continued...