CalProps Analysis: Prop 12

Proposition 12, also known as the Veterans' Bond Act of 2008, would authorize issuance of $900 million in bonds to assist veterans in purchasing farms, homes and mobile home properties.

The non partisan California Legislative Analyst's Office estimates the proposition will result in costs of about $1.8 billion to pay off both the principal ($900 million) and interest ($856 million) on the bonds; costs paid by participating veterans.

California voters have voted 26 times to assist veterans with Cal-Vet bonds since the 1920’s, though Prop 12's request for $900 million is the largest request to date.

Republican State Senator Mark Wyland was primary sponsor of Proposition 12, placed on the ballot by unanimous votes in both house of the legislature. Governor Schwarzenegger has also endorsed the measure.

There is no organized opposition ot the measure. A Mountain View-based attorney named Gary Westly, who has something of a name for himself writing dissenting opinions of ballot measures, has authored the opposition argument in the offical voters' guide.

Arguments in Favor

The Veterans Bond Act will help California's veterans achieve the American dream of homeownership.
Veterans who risked their lives in places like Kuwait, Iraq and Afghanistan will be eligible to join the more than 420,000 others who have bought a home with a CalVet loan
Loans are repaid, along with all program costs, by the loan holders at no expense to the taxpayers
There have never been any costs to the taxpayers under the previous authorizations
The program helps reinforce the housing market in California
Cal Vet loans generate thousands of housing industry-related jobs resulting in millions of dollars in annual payrolls.

Arguments in opposition:

Benefits are not limited to only veterans who served in a combat zone but to any that served during a time of war
Possibly resulting in unavailable funds for those who actually served in harm’s way
Eligible beneficiaries of the program may have never even left the United States
Voters may wish to have the program rewritten so serving in harm’s way is a requirement for eligibility.
The interest on the bonds is federal and state tax free, which in a roundabout way means all taxpayers are paying some costs
State taxpayers will be liable for any shortfall in the event beneficiaries fail to make payments and are unable to sell the home for full value

So what do you think? Take a deeper look at the initative's finances here, or join one of the CalProps groups advocating for or against Prop 12: