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Guide to Voting Day Props

Proposition 1: Water Supply

A “yes” means:

– The state will be able to sell $7.1 billion in new bonds; $425 million would be able to be sold in the already approved bonds; these will pay for statewide water projects and improvement in water environment.

– Focuses on future drought planning and storage

A “no” means:

– $7.1 billion in new bonds allocated will not be approved; it will not expand the state debt by $7.1 billion.

– Existing approved $425 million in resource related bonds will still be available to other resources — not just water.

Fiscal impact:

– Allows state to borrow up to $7.12 billion for water projects in bonds with a 5 percent interest rate

– Bonds would be sold over 10 years and repaid over 30 years

– Affects how much local governments spend on local water projects; would likely be less

– Reduces local government spending because of state government

Proposition 2: Budget Stabilization

A “yes” means:

– State debt will be paid faster.

– New rules would be made for state budget reserves.

– Local school budget reserves would be capped sooner.

A “no” means:

– State debt will be paid at same rate.

– Governors will still be able to dip into the Budget Stabilization Account anytime they want.

– A maximum will not be created for local school budgets.

Fiscal impact:

– State would make extra payments toward existing debts, which would mean less money for other items in state budget in short term; there would also be less debt to pay off in the future.

– Budget stabilization account affects state budget reserves depending on how the economy is, how much is earned through capital gains tax revenue and decisions made by the Legislature and the Governor.

– Required conditions to be met before money goes toward state reserves for schools.

– It would be years before money is put into school district reserves, and districts would likely spend more on teacher pay, books and other costs.

Proposition 45: Healthcare Rates

A “yes” means:

– Insurance rates for individuals and small groups will have to be approved by the Insurance Commissioner before going into effect.

A “No” means:

– Insurance through individuals and small groups will go through the same process as government programs and large groups to go into effect.

Fiscal impact:

– Fiscal impacts are on state administrative costs.

– Additional costs would not exceed the low millions, but they could become a higher amount in some years.

– It would result in additional costs for the California Department of Insurance.

– It does not impose new Department of Managed Health Care duties, but could increase their administrative costs, and if rare review activities are reduced or eliminated, there would be hundreds of thousands in administrative savings.

– It could create new costs for Covered California and the new rate approval process would likely result in longer approval processes.

Proposition 46: Medical Negligence

A “yes” means:

– Medical malpractice damages will be increased from $250,000 to $1.1 million.

– Health care providers would have to check a state prescription drug database before they prescribe or dispense a list of certain drugs to a first time patient.

– Hospitals would only test certain doctors for drugs and alcohol.

A “No” means:

– Non-economically damaging medical malpractice suits will stay capped at $250,000

– Doctors will not have to check records to see if a patient is already on, or has already taken, certain prescriptions.

– Alcohol and drug testing on doctors will not be enforced.

Fiscal impact:

– It will raise fiscal limit on non-economic damage funds would increase overall health care spending.

– A higher limit might increase the amount of malpractice claims, which would lead to more spending.

– A potential increase in malpractice costs would be between five percent to 25 percent, up from two percent.

– Raising the limit would likely increase health care spending from 0.1 percent to 0.5 per cent.

– Changes in health care service costs would increase from 0.1 percent to 1 percent.

– By requiring health care providers to check Controlled Substance Utilization Review and Evaluation System (CURES) and that hospitals conduct physician alcohol and drug testing, it could have significant fiscal effects on state and local governments.

– There could be savings due to lowered prescription drug costs, savings due to lower costs related to prescription drug abuse and spending due to additional costs related to checking CURES.

– For the effects of physician alcohol and drug testing, there could be savings from fewer medical errors, spending due to costs of performing tests, and state administrative costs would be less than $1 million, mostly coming from fees paid by physicians.

Proposition 47: Criminal Sentencing

A “yes” means:

– Criminals who commit nonviolent crimes would get reduced sentences.

– Funds from this measure would go to school truancy, dropout prevention, services for victims, mental health treatments, drug abuse programs and other rehabilitation programs for offenders to stay out of prison.

A “No” means:

– Criminals who committed non-violent crimes will not receive reduced sentences.

Fiscal impact:

-There will be fewer offenders eligible for state prison and county jail sentences, which would help with reduction of the state prison and county jail populations and cut costs.

– It would reduce state and county court fees spent on cases and offenders would spend less time on county community supervision.

– Savings in the state criminal justice system could be in the low hundreds of millions, with county fiscal savings being several hundred million dollars annually.

Proposition 48: Indian Gaming

A “yes” means:

– State compacts with the North Fork Rancheria of Mono Indians and the Wiyot Tribe will go into effect.

– North Fork would be able to operate a new casino in Madera County; they would have to make payments to local and state governments and the Wiyot and other tribes.

A “No” means:

– North Fork and Wiyot Tribe will have to seek new agreements with local and state government and pick a new location if they still want to construct and operate a new casino.

Fiscal impact:

– A Memoranda of Understandings (MOUs) was signed between all entities, of which the fiscal effects would depend on several factors such as the impact of the casino, the size and type of casino built and the requirements in the MOUs.

– Payments would be $1.5 million annually to the state government for the life of the compact.

– Madera County and the City of Madera would receive between $16 million and $35 million from one-time payments made by the North Fork Rancheria of Mono Indians.

– Madera County, City of Madera, and Madera Irrigation District would receive approximately $5 million in annual payments after the casino opens and until the compact ends.

– Local governments could receive $3.5 million annually through the span of the compact.

– Expanded gaming on tribal lands could reduce other sources of state and local revenue from gaming, such as the California Lottery, horse racing and card rooms.