Financing Capital Formation for Local Governments

摘要

The report analyzes the impact of California's Proposition 13 on local government financing and proposes alternative means of capital formation. Local governments need to accumulate large amounts of capital in order to provide public services and improve government efficiency. Analysis of local government financial reports from 1973 through 1977 shows that capital outlays have grown more rapidly than personal income and will probably continue to increase 9 to 10 percent each year. Proposition 13's prohibition of general obligation bond issues will result in an estimated 26.7 - percent reduction in the availability of capital financing. Alternative approaches that could be taken by local governments include lease - revenue bonds, special tax bonds, repayment reserves, pay - as - you - go, and debt insurance. The State could provide grants, guarantees for local bonds, financial intermediation, debt subsidies, and reinstatement of general obligation credit. The report recommends that the State take the following actions: enact legislation allowing local governing bodies to seek voter approval for special taxes which can be used as security for special bonds, set up a program of interest subsidies for school districts, and establish a locally funded system of bond reserves as an additional source of security. The use of lease - revenue bonds should be discouraged. A State constitutional amendment to reinstate the ability of local governments to secure general obligation bonds with voter approval is suggested. The appendices contain descriptions of long - term debt instruments and statistics on types of long - term indebtedness. A bibliography is included.