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<br />Fiscal Effects <br /> <br />78 <br />Page 11 <br /> <br />Bond Costs. The cost of these bonds would depend on interest rates in effect at the time they are <br />sold and the time period over which they are repaid. The state would likely make principal and interest <br />payments from the state's General Fund over a period of about 30 years. If the bonds were sold at an <br />average interest rate of 5 percent. the cost would be about $10.5 billion to payoff both the principal <br />($5.4 billion) and interest ($5.1 biilion). The average payment would be about $350 million per year. <br /> <br />Property Tax-Related Impacts. The initiative provides funds for land acquisition by governments and <br />nonprofit organizations for various purposes. Under state law. property owned by government entities <br />and by nonprofit organizations (under specified conditions) is exempt from property taxation. To the <br />extent that this initiative results in property being exempted from taxation due to acquisitions by <br />governments and nonprofit organizations, local governments would receive reduced property tax <br />revenues. We estimate these reduced property tax revenues would be several million dollars <br />annually. <br /> <br />Operational Costs. State and local governments may incur additional costs to operate or maintain <br />the properties or projects, such as new park facilities, that are purchased or developed with these <br />bond funds. The amount of these potential additional costs is unknown, but could be tens of millions <br />of dollars per year. <br />