Sacramento, CA — The Governor has proposed using the state’s projected surplus to pay off the $15 billion Economic Recovery Bond. In 2004, former Republican Governor Arnold Schwarzenegger persuaded voters to approve the Proposition 57 bond to close the state’s budget deficit.
In his revised May budget, Brown wants to spend $1.6 billion from a projected surplus to make the final payment. Brown’s finance department estimates it costs the state almost $20 billion to repay the bond, which includes $4.5 billion in interest.
State treasurer spokesperson Tom Dresslar calls the bond a low point in California’s fiscal management and says, “The sooner we get it behind, the better.”