Pete Rates the Propositions
Sensible opinions on the California ballot propositions      since 1980      by Pete Stahl

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Pete Rates the Propositions
November 1996

Pete recommends:
204   YES   $1 Billion Delta & Water Bonds
205   YES   $700 Million Jail & Juvenile Facility Bonds
206   YES   Cal-Vet Loan Program
207   NO   Preventing Limits on Attorney Fees
208   YES   Campaign Finance Reform: League of Women Voters/Common Cause Proposal
209   NO   Elimination of Affirmative Action (CCRI)
210   YES   Minimum Wage Increase
211   NO   Making Securities Fraud Lawsuits Easier
212   NO   Campaign Finance Reform: CalPIRG Proposal
213   NO   Prevention of Suits by Drunk or Uninsured Drivers
214   YES   HMO Regulation: Service Employees International Union Proposal
215   YES   Medical Use of Marijuana
216   YES   HMO Regulation: California Nurses Association Proposal
217   YES   Retaining Top Income Tax Brackets
218   NO   Local Fees & Taxes: Great-Grandson of Prop 13

Proposition 204: $1 Billion Delta & Water Bonds - - YES

(Please see My semi-biennial lecture on bonds for my opinions on bonds in general.)

The delta of the Sacramento and San Joaquin rivers is the most important natural resource in California. It is the source of water for over half the people in the state and nearly half the fruits and vegetables grown in the country. If the Delta is degraded by saline backflow from San Francisco Bay, pollution or a host of other dangers, we're all in big trouble. Prop 204 will provide $583 million to help make sure this doesn't happen. Included in that figure is the state's contribution to the state/federal CALFED Bay-Delta Program to restore and maintain ecological health in the Delta.

Prop 204 bond proceeds will also fund wastewater treatment, water reclamation, agricultural runoff management, and a whole slew of other projects throughout California. Read about them in your Proposition Fun Book. These projects are not optional; they're crucial to the long-term viability of the state.

Proposition 205: $700 Million Jail & Juvenile Facility Bonds - YES

(Please see My semi-biennial lecture on bonds for my opinions on bonds in general.)

County jails are filled to over capacity in nearly every county. It's gotten so bad that courts have imposed absolute population limits, forcing over 21,000 prisoners a month to be released early. That's right, twenty-one thousand every month. Props 2 (Nov. '82), 16 (June '84), 52 (June '86), 86 (Nov. '88) and 147 (Nov. '90) provided $1.6 billion for new jails and juvenile facilities. Prop 205 pours in another $700 million to relieve the overcrowding.

If you favor getting tough on criminals, you have an obligation to vote to fund more jail cells. If the jails aren't expanded, more and more convicts will be freely walking the streets with you and your family. Entire cities will be held hostage to fear and terror. Vote yes on 205 to prevent this god-awful scene. Don't turn California into a true-life Steven Segal movie.

If, on the other hand, you believe that incarceration is not the best way to rehabilitate criminals, you may be tempted to vote against Prop 205. Fewer jail cells will mean shorter sentences and the institution of better alternatives such as work furloughs, social programs, etc. But at what cost? The courts do not step in until well after overcrowding has gotten out of hand. In the meantime, you will have subjected the inmates to some of the most cruel, inhumane conditions imaginable: overcrowded jails. Your goal of using other means to rehabilitate criminals may be noble, but this is the wrong way to achieve it. You cannot trample on the human rights and basic dignity of the inmates in your quest to reform our system of justice. You must vote in favor of 205.

Proposition 206: Cal-Vet Loan Program - YES

The Cal-Vet loan program provides low-interest home and farm loans to veterans. Cal-Vet gets the money it lends from the sale of bonds. When the veterans pay off their loans, they do so at a rate that allows Cal-Vet to pay for the bonds, the interest on the bonds, and all bureaucratic overhead. In this way, the program has been completely self-supporting since 1921 (the year of Warren Harding's inauguration). Clearly the Cal-Vet program is a winner. The only catch is that the State periodically needs voters' permission to sell more bonds to fuel Cal-Vet. Hence Props 29 (Nov. '84), 42 (June '86), 76 (June '88), 142 (Nov. '90), and the current Prop 206. I heartily recommend a vote in favor of 206 to ensure the continuation of this smashing success.

Proposition 207: Preventing Limits on Attorney Fees - NO

Prop 207 is intended as an antidote to the anti-lawyer Props 200, 201 and 202 that appeared on your March primary ballot. Trouble is, those three initiatives all failed. So what good is Prop 207? Not much. 207 reinforces existing laws, and elevates some current State Bar rules to legal status. Other than that, 207 is pretty lame, its main purpose having already been accomplished with the defeat of the three measures in March.

Oh, wait a minute, I found something: Prop 207 weakens the disciplinary process for attorneys who file frivolous lawsuits, allowing more appeals and requiring three offenses in five years (instead of just one) for the Bar to take action. Okay, I have a real reason to vote against 207. Now I can relax.

Campaign Finance Reform: 208 & 212

Proposition 208: League of Women Voters/Common Cause Proposal - YES
Proposition 212: CalPIRG Proposal - NO

When Diane Feinstein ran for governor in 1990, she commented that her standing in the polls each week seemed to be a direct result of how much television time she was buying. When she bought a lot, her standing went up; when she bought a little, it went down. Logically, if she bought enough air time, she would win the election, so she should halt all campaign activities except raising the cash to buy air time. Four years later Michael Huffington took Feinstein's lesson to heart and nearly defeated her.

Money is the mother's milk of politics, as '70s power boss Jesse Unruh so aptly put it. Our elected officials have to be professional fund-raisers first, legislators and executives second. They become indebted, dependent, nay, addicted to the largesse of their biggest contributors as a matter of political survival. Do those contributors get special consideration when the officials act? What a dumb question. Of course they do—to do otherwise would endanger future contributions. What's the difference between this and out-and-out bribery? You tell me.

None of this is news, to be sure. What is news is there are two initiatives on your ballot that seek to end our government-for-sale. Props 208 and 212 will impose strict limits on spending and contributions, place a cap on PAC donations, prevent rich candidates from swamping the opposition with personally-financed campaigns, and ban donations from lobbyists, non-election-year fundraising and candidate-to-candidate transfers.

Those of you with long memories will remember that we've been through this before. In 1988 California voters passed two campaign finance reform propositions, 68 and 73. But 73, which got the most votes, was largely struck down in court due to provisions that gave incumbents an unfair advantage. A further decision prevented any of the milder Prop 68 from going into effect to replace the disgraced 73.

This is important, because several provisions of Prop 212 are known to be unconstitutional under current precedent. The backers of 212 hope future courts will overturn the decisions that led to the invalidation of 73. They're playing a game of "chicken" with the courts, and it's a game they'll lose; then we'll be no better off than we are today. The more conservatively written Prop 208, on the other hand, is widely thought to be capable of withstanding legal challenge. For this reason I support 208; I want to prevent a repeat of the Prop 68/73 debacle. Let's get campaign finance reforms in place now; we can quibble later on the contribution limits.

So on to the details:

Contribution limits. Since Prop 73 was quashed, there are now no limits on how much money candidates can raise for state or most local offices. Candidates can accept unlimited amounts from individuals, PACs, unions, lobbyists, political parties, other campaigns, or their own bank accounts. Yikes. Under the current propositions, contributions from individuals and PACs would be limited to between $100 and $200 (212) or $500 (208), depending on the size of the race, with the total not to exceed $25,000 per 2-year election cycle (208) or $2,000 per calendar year (212). (The $2,000 figure is so small it is widely thought to put 212 on thin ice constitutionally.) Businesses, unions, banks and non-profit organizations would be subject to the same limits as individuals (208) or prohibited from contributing at all (212). 208 limits political party contributions to between $87,500 and $3.5 million, depending on the size of the race, while 212 nearly eliminates them at $100 to $200. Both measures would ban cash infusions from other campaigns, contributions from lobbyists, non-election-year fundraising, and "war chests" of funds left over from previous campaigns.

Spending limits. Prop 212 tries to impose mandatory spending limits, which were ruled an unconstitutional restriction on free speech by the U. S. Supreme Court in 1976 in "Buckley v. Valeo." Prop 212 contains language converting the limits to voluntary if its mandatory limits are struck down; it's anybody's guess whether this will work. The limits range from $150,000 for Assembly to $5 million for governor in general elections (roughly half those amounts for primary elections). Spending in local races is capped at forty cents per resident of the voting area.

Prop 208 imposes voluntary spending limits, which have been upheld. The limits for general elections range from $200,000 for Assembly to $8 million for Governor (75% of those amounts for primary elections). The limits would not apply to local races. Prop 208 offers incentives to candidates who accept the spending limits. They may double the contribution limits mentioned above; they receive a special citation on ballots; and they get to place a free statement in voter pamphlets (available to non-limit-acceptors for a fee).

Small contributor groups. Both 208 and 212 seek to increase the influence of lower and middle class voters by allowing them to pool their resources in committees, with relaxed contribution limits. Prop 208's "Small Contributor Committees" are composed of one hundred or more individuals, each of whom may donate no more than $50 per year. These committees may contribute between $200 and $1,000 to a candidate, depending on the size of the race. Prop 212's "Citizen Contribution Committees" are composed of twenty-five or more individuals, each of whom may donate no more than $25 per year. These committees may contribute between $10,000 and $20,000 to a candidate, depending on the size of the race. Why the huge discrepancy between 208 and 212 here? Prop 208's committees are intended as small groups of individuals, whereas 212's committees are intended to be conduits for union money. If you're a union supporter you should be cheering for this special dispensation, but if you're a fan of fairness, you might not be so sure about 212's approach.

Gifts and honoraria. Under the Ethics in Government Act (1990), candidates and office-holders may not accept speaking fees, and are limited to $250 per year in gifts from any one source. Prop 208 doesn't touch this act, but Prop 212 repeals it. Why? Because CalPIRG feels EGA is full of loopholes, and wants something stronger. Here's U.S.PIRG CEO Doug Phelps: "What Proposition 212 repeals are sections of California code which are not the strict limits that the California Constitution requires. These sections need to be replaced with tough laws by the Legislature or by local communities, replacing the weak restrictions being repealed with strict, tough bans."

What an idiot! As regular readers of this pamphlet know, you should never vote down—much less repeal—legislation because of what it doesn't do, in hopes that something stronger will come waltzing down the pike. It just won't happen. It wasn't easy to pass the Ethics in Government Act; it took an FBI sting and legislators in jail. If Doug Phelps thinks he can get a stronger bill passed in today's political climate, he has no business leading a national political organization. What an idiot.

As you can tell, to me the choice is clear. It's obvious that we need one of these two measures. It's obvious that 212 is fraught with peril. It's obvious that 208 is well-intentioned and well-crafted. So obviously you should vote for 208, and let CalPIRG play its games of "chicken" with someone else's car.

Proposition 209: Elimination of Affirmative Action (CCRI) - NO

If you've been living in a hole and haven't heard, Prop 209 (the "California Civil Rights Initiative") would end affirmative action programs for public employment, education and contracts at the state and local level. (Federal programs operating in California would continue to follow federal affirmative action guidelines.)

Let me clear up some common misconceptions about affirmative action. By law all affirmative action plans must be remedial, not preventive. That is, they can only be remedies to well-documented discrimination by specific agencies against specific groups, not blanket policies to prevent future discrimination. Also, set-asides, such as reserving a certain number of places at a public medical school for some minority, are illegal; instead the school may consider race only as a factor to distinguish otherwise equally qualified applicants. Finally, state departments are merely "expected," not "required," to meet goals for awarding contracts to minority- and women-owned businesses. This allows the state much more flexibility than is commonly thought.

Given that it can be applied only as a remedy, that set-asides are illegal, and that contractor goals are not firm, affirmative action doesn't seem as diabolical as it has been portrayed. But is it necessary at all? Absolutely. Why? Because of human nature. People feel most comfortable dealing with the familiar, so the predominant race/gender/religion of any group tends to become self-perpetuating. If you're in an all-male fire department or an all-white construction crew, in a subtle way you don't trust women or minorities the way you do the kind of people you're used to, so you're less likely to hire or promote them. At least this is what I have observed over the years.

It's one thing if private businesses want to operate this way, but it's illegal for the government to discriminate. Affirmative action, limited as I've described, is the best way to deal with natural, institutionalized discrimination in public hiring, promotion, contracts and admissions.

Proposition 210: Minimum Wage Increase - YES

The federal minimum wage will ratchet up to $5.15 an hour in September, 1997. Prop 210 proposes to increase it further in California, to $5.75 in March, 1998. It costs more to live in California than in other states, mostly due to our out-of-sight housing prices. So it's only sensible that our minimum wage be higher than the rest of the nation's.

Proposition 211: Making Securities Fraud Lawsuits Easier - NO

In 1995 Congress made it harder for shareholders across the country to sue for securities fraud. Prop 211 proposes to swing the pendulum back towards the shareholders and their attorneys. It's a laudable goal. Unfortunately, 211 swings the pendulum too far.

Currently, plaintiffs suing for securities fraud must prove that they relied on fraudulent information from the defendants to make investment decisions. Under 211, the burden of proof shifts to the defendants: they must prove that ". . . the security would have been purchased or sold even if plaintiff had known of the misconduct." This is well nigh impossible, given the occult methods most people use to make investment decisions. Proving a hypothetical like "would have been purchased" presents an insurmountable obstacle to the defense, and will attract huge numbers of nuisance suits.

Prop 211 also shifts the burden of proof to defendants who claim that their statements or actions didn't influence a stock's price. This won't be easy under the best of circumstances. And 211 makes corporate officers personally liable for damages if they ". . . assist in any deceptive practice, statement, course of conduct or scheme." Given the potential for liberal interpretation of "assist," I can see a lot of CEOs hiding under rocks if 211 passes.

Prop 211 might have earned my support if it had some real safeguards against nuisance suits, but as written, I find it easy to believe the doom-sayers. 211's heart is in the right place, but its other body parts are too far out there.

Proposition 213: Prevention of Suits by Drunk or Uninsured Drivers - NO

Prop 213 will prevent drunk and uninsured drivers from suing for pain-and-suffering damages for injuries sustained in car crashes. 213 will also prevent anyone who is injured while committing a felony from suing anyone for negligence. The principle is simple: we shouldn't allow people who break the law to profit from injuries they receive as a result of their infractions.

But there's something else going on. Look closely: drunk and uninsured drivers are prevented from suing. Drunk drivers I can understand—they've behaved recklessly and probably contributed to their own injuries. But uninsured drivers? They may be reckless economically, but whether a driver is uninsured has nothing to do with fault in an accident. The principle I pointed out above doesn't apply; uninsured drivers do not receive injuries as a result of being uninsured. If they are injured and not at fault, they should be entitled to non-economic damages just like anyone else.

So what's going on? A bit of strong-arming by the insurance industry, I'm afraid. It's the insurance companies, after all, who pay most pain-and-suffering awards. They would like to minimize their losses. I can hear it now: "Those millions of uninsured California drivers are powerless—let's take away their right to just compensation! We'll save lots of money that way. And if Prop 213 'encourages' a few uninsured drivers to pay for new policies, so much the better! Hoo hoo ha ha ha."

You might be thinking, "Listen, chump, those uninsured drivers are breaking the law every time they key the rusty ignitions on their old jalopies. They don't deserve the same rights as we law-abiding, premium-paying citizens. You've gotta play by the rules if you want justice." I hear you, and it's a tantalizing argument. Step back from your righteous indignation for a moment, though, and consider the severity of the punishment and the lightness of the crime. You are not allowed to run a car off the road with impunity if its registration sticker isn't current. You cannot get away with smashing a car's windshield if it's missing a front license plate. So why should you be allowed to duck paying pain-and-suffering damages to someone you hit simply because the victim's insurance wasn't paid up?

What's going on is this: Prop 213 is special interest legislation for the insurance industry, an echo of March's failed Prop 200. On the surface, the uninsured motorist provision looks like a reasonable incentive to induce drivers to get insurance. But closer inspection shows otherwise. Lack of eligibility for non-economic damages—for justice—is too high a price to pay for simple lack of insurance.

HMO Regulation: 214 & 216

Proposition 214: Service Employees International Union Proposal - YES
Proposition 216: California Nurses Association Proposal - YES

I am sorry there are two initiatives on this ballot dealing with HMO regulation. They are both good measures, dearly needed by the mistreated millions of HMO patients in this state. Props 214 and 216 differ from each other only in minor ways. I would be happy with either one. But the fact that there are two seriously jeopardizes the passage of both. When voters are confronted with a choice of complex bills, they become stultified and suspicious. Rather than invest the time and effort to figure out what the issues are, they just say no to the whole thing. It's sad, but true. Nevertheless, let me tell you about Props 214 and 216.

About one-third of Californians get their medical care through HMOs. These organizations, born of desperation with the exploding cost of health care in the '80s, are extremely cost-conscious. Most emphasize "wellness," which is a proven money saver in patient care. That's great. But there are other cost controls that are not so patient-friendly. Most HMOs pay doctors on a per-patient basis, encouraging doctors to limit the length of patient visits. And they discourage or deny approval to expensive procedures, sometimes passing the savings on to the physicians as a reward. Props 214 and 216 impose regulations on HMOs, banning most of these practices.

Gag rules. An HMO can save money if a physician fails to inform patients of more expensive alternatives to the treatments they're receiving. This is unethical, of course, and illegal under a new law Governor Wilson signed in July. But HMOs can get around the law by having unwritten gag rules, and by simply terminating "without cause" doctors or nurses who recommend too many expensive procedures. Props 214 and 216 will make illegal all gag rules of any kind, and will require all terminations to have a plausible, just cause.

Financial incentives. In the past, HMOs have offered direct financial incentives to doctors and nurses for limiting patients' hospital stays, prescribing cheaper drugs or using less expensive procedures. These direct incentives are now illegal under federal law, but they've been replaced with "risk pools" and profit-sharing arrangements that have the same effect. 214 and 216 will prohibit all financial incentives to withhold medically appropriate care.

Denial of treatment. Currently an HMO can deny a treatment your doctor recommends if the HMO review staff feels it's unnecessary, unproven, or more expensive than some equally-effective alternative. The review staff might never have met you, but its decision stands (pending your written appeal, which will probably be denied). Under 214 and 216, the review staff must physically examine you before refusing to approve your doctor's recommended treatment.

Denial criteria. All insurers have limits for what procedures they will pay for for various medical conditions. Exactly what these limits are are very closely held secrets, though, and may well have more to do with cost controls than medical necessity. Props 214 and 216 will require HMOs to disclose what their criteria are for allowing or denying care. If patients see the criteria, they could choose better among HMOs, and they might be able to change a particularly hard limit.

And so on. 214 and 216 have additional provisions, of debatable effectiveness, relating to staffing standards, public disclosure of finances, arbitration and patient record privacy. None of these is a step backwards, though.

What 216 adds. In Prop 216 but not 214 is an independent consumer watchdog organization intended to be an advocate for individuals, publish reports on quality of service, and help HMOs follow the new regulations. 216 imposes new taxes on bed reductions, mergers, conversion from non-profit to for-profit, and stock options to fund its watchdog organization and other provisions.

Be warned: the reforms imposed by 214 and 216 will not come cheaply. It is estimated that the cost of health care may rise anywhere from two to fifteen percent with the new regulations. I tend to believe the low estimate (a UC-San Francisco study) rather than the high (an HMO-sponsored study), but even if it's high, the new services and responsiveness these measures will bring will be worth it.

As of this writing, both 214 and 216 are trailing badly in the polls. I prefer 216 to 214, but either would be better than neither, so I recommend you vote for both propositions. And to the sponsors of 214 and 216: stop your backbiting and infighting right now. Your childish inability to unite behind a single initiative has baffled voters and given ammunition to the opposition, and will probably result in the failure of the both measures. Shame on you.

Proposition 215: Medical Use of Marijuana - YES

Prop 215 will allow people to grow and possess marijuana for medical use when recommended by a physician. 215 does not legalize marijuana for non-medical use, and leaves all other current drug laws intact. Marijuana has been shown to have beneficial effects on patients undergoing chemotherapy, and those suffering from glaucoma, AIDS, multiple sclerosis, and other ailments. Vote for 215—it's the compassionate thing to do.

Proposition 217: Retaining Top Income Tax Brackets - YES

The top state income tax bracket normally starts at $32,000 for individuals, $65,000 for married couples. This is so low it's essentially a flat tax for California's middle and upper class. In the recession year of 1991, the state temporarily added two higher brackets, starting at about $100,000 and $200,000 for individuals, double those amounts for married couples. The temporary top brackets have trivially higher rates. For example, someone with an income of $200,000 (after deductions) sees an increase of just seven hundred dollars in state income tax. Nevertheless, the new brackets have provided $700 million in additional revenue each year.

The temporary brackets expire this year. Prop 217 will reinstate them and require a vote of the people to get rid of them. If you're a fan of Steve Forbes, feel free to vote against 217. But if you feel a fair income tax system should be indexed so the second hundred thousand dollars is taxed more than the first, 217 is your way to do it.

Proposition 218: Local Fees & Taxes: Great- Grandson of Prop 13 - NO

Prop 218, sponsored by the political descendants of Howard Jarvis and Paul Gann, seeks once again to reduce the amount of money local governments can collect in taxes and fees. Like its ancestors, 218 is many-pronged. The first attack is on water, garbage, sewer and other infrastructure fees. Many of these fees contain surcharges to fund related programs, like "lifeline" utility subsidies for seniors. 218 would limit fees to cover only the direct cost of service, ending funding for these other programs.

You might agree in principle that fees should pay only for the services provided. "Let them find some other way to fund their lifeline programs," you pronounce. Okay, I'll support Prop 218 when you show me the alternative funding. Until then, passage of 218 will mean the elimination of programs paid for by fee surcharges. No one really wants to see that.

Prop 218's second prong relates to assessments charged to property owners in a specific area to pay for street lighting, parks, mosquito abatement and other benefits in that area. Under 218, if it can be shown that any item (say, a park) provides benefit to anyone outside the assessment district, the assessment must be reduced to cover only the proportional benefit to those in the district. Furthermore, the assessment must be allocated, parcel by parcel, so each property owner pays in direct proportion to his calculated "benefit." This is just plain silly, and enough of a procedural nightmare that it will prevent many neighborhoods who want to pay for local improvements from being able to do so.

218's assessment prong gets even sillier, though. Before any assessment can go into effect, all property owners in the area must vote in a mail-in election, not one-man-one-vote, but one-dollar-one-vote. That is, ballots are weighted based on the amount of assessment each voter would pay. This is ludicrous, and almost certainly unconstitutional. And it's off the meter on the Silly Scale.

Prop 218 has other prongs attacking taxes enacted by charter cities and making it easier to sue or force an election to stop assessments. But I don't need to go into those. Prop 218 would eliminate many useful services, and it would erode local areas' abilities to determine what improvements they want to pay for. Voting for it would be silly indeed.

My semi-biennial lecture on bonds

When California wants to finance a large project, it asks the voters for permission to take out a loan. Props 204 and 205 are just such requests. If the voters approve, the legislature may take out loans for the projects by selling general obligation bonds, which are paid back with interest over twenty-five years or so. The bond payments come out of the state's main budget, the General Fund. So when we vote on the bonds, we are really voting on whether the project in question ought to be added to the state's budget.

"Wait a minute!" I hear you cry. "What about those interest payments? Won't we end up paying more for interest than for the bonds themselves?" This used to be the case, but with today's low interest rates each dollar of bond money will cost only thirty cents in interest, accounting for inflation. (See page 78 of your ballot pamphlet for details.)

"Okay," you admit, "but loans are still more expensive than pay-as-you-go." It's true, they are. But loans are the only way to buy a house, or a car, or anything else that you need immediately but can't pay for yet. It's worth paying the premium of interest to get the funding now.

"Well and good," you continue, "but there are $1.7 billion in bonds on this ballot. Isn't that too much to borrow?" For you, yes, but the State of California can handle it. Current bond payments total about 5.3% of the General Fund; this ballot's bonds would barely raise that figure. We had a budget surplus this year, remember, so this is hardly a budget buster.

Props 204 and 205 will fund long-lived, tangible acquisitions, like flood control channels and jail buildings. It's sensible to make extended payments for items which will be used far into the future. Remember, too, that California's population continues to grow by hundreds of thousands of people a year. Borrowing makes particular sense if you know your income will go up in the future. As the state grows and the economy soars, the General Fund will certainly grow too.

There is one last reason to vote for a bond measure. In addition to being formal requests for permission to take out "loans," bond measures are also looked upon as referenda on the merits of the proposed projects. If a bond measure fails, legislators are likely to believe that the public feels the project is not worthy of receiving any state funding. You may have meant, "yes on the project but no on the bonds," but your message to Sacramento will read, "no on the project." So if you vote down a bond measure just because you don't like bonds, you may well have killed forever the project the bonds were to have funded.

Copyright © 1980-2024   Peter L. Stahl
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