How California General Obligation Bonds Work
General obligation (GO) bonds are the primary way California borrows money for large public projects, from school construction to climate infrastructure.
The State Treasurer's Office sells these bonds on behalf of the state after voters approve them at the ballot.
Voter Approval Required
The California Constitution requires voter approval for most state general obligation bonds. These bonds are backed by the full faith and credit of the state and repaid from the General Fund.
According to the Legislative Analyst's Office ballot analysis published November 5, 2024, the state was repaying about $80 billion in outstanding bonds at that time, with an additional $35 billion previously approved but not yet sold. Annual General Fund debt service was about $6 billion, roughly 3% of General Fund revenue.
Source: Legislative Analyst's Office, "Overview of State Bond Debt," November 5, 2024 (lao.ca.gov).
2024 Bond Measures Approved by Voters
On November 5, 2024, California voters approved two $10 billion GO bond measures:
- Proposition 2 (Public Education Facilities Bond): Authorizes $10 billion for K-12 school and community college construction and modernization. Passed with approximately 58.7% of the vote. (Associated Press race call; Ballotpedia, November 2024.)
- Proposition 4 (Climate Bond): Authorizes $10 billion for drinking water, wildfire prevention, land conservation, and other climate-related projects. Passed with approximately 59.8% of the vote. (Associated Press race call via CapRadio, December 2, 2024.)
The LAO estimated Proposition 2 would cost about $500 million per year for 35 years to repay, and Proposition 4 about $400 million per year for 40 years.
Sources: Legislative Analyst's Office ballot analysis (November 5, 2024); CapRadio, "Here's what we know about how California voted on 2024 state propositions" (December 2, 2024); Ballotpedia, California Proposition 2 (2024).
The Treasurer's Role in Bond Sales
After voters approve a bond measure, the State Treasurer's Public Finance Division sells the bonds in the municipal market. The October 2024 Debt Affordability Report notes that over the prior five fiscal years, California issued an average of $7.5 billion in GO bonds annually. In 2023-24, the state issued $8.3 billion, including $3.5 billion in refinancing to reduce debt service costs.
Bond pricing affects how much taxpayers ultimately pay. Transparent reporting on bond proceeds and project completion is one focus area in Phil Ting's State Treasurer priorities.
Source: California State Treasurer's Office, Debt Affordability Report (October 2024).
Paid for by Phil Ting for Treasurer 2026, FPPC ID #1444108.