CA: Governor pushes 'really big' bond to remodel state

San Diego Union - Tribune ^ | 12/5/05 | Michael Gardner - CNS

[NormsRevenge]

SACRAMENTO – Gov. Arnold Schwarzenegger and legislative leaders are crafting an aggressive campaign to remodel California that promises to go beyond the traditional bond-and-build approach to schools and roads.

If approved by voters next year, their bond package of unparalleled scope could raise $50 billion or more to speed commuters home, quickly move imported goods from ship to store, modernize campuses, build power plants, provide affordable housing, make hospitals safe from earthquakes and repair aging levees that guard homes, farms and drinking water.

"If we are not bold, how can we meet the challenges of the future?" Schwarzenegger told a recent gathering of county leaders.

Details of the Republican governor's proposal remain closeted, but the leading Senate Democrat has suggested that the outcome will ignite a public-works boom not seen for a half-century.

Moreover, Schwarzenegger and legislative leaders might for the first time demand user fees to help pay down new construction debt rather than squeeze programs financed by the general taxpayer. Shippers might be called on to subsidize truck-only freeway lanes, and developers and farmers could be tapped for levee repairs.

But any proposal to impose fees will be resisted by tax-wary and debt-conscious Republicans in the Legislature. A revolt could put enough pressure on the governor to pare down the bond package and discard targeted surcharges.

Democrats also are likely to hold out for a novel approach linking transportation and housing. Urban housing projects close to public transit should get priority, they say.

Californians traditionally support bonds, agreeing to billions for roads, schools, parks, libraries, water, the environment and, most recently, $3 billion for stem cell research.

San Diego County voters, weary of gridlock and potholes, supported by the necessary two-thirds majority a local half-cent-on-the-dollar sales tax increase in November 2004 that is expected to raise $14 billion over 40 years for transportation.

"We're slapped in the face twice a day with traffic congestion," said Garry Bonelli, a spokesman for the San Diego Association of Governments.

The San Diego region will have $42 billion available for transportation over the next quarter century, but that amount falls $25 billion short of need, according to a SANDAG analysis.

San Diego County would receive $122.5 million for various road and public transit projects as part of a separate $10.3 billion bond proposal in a bill carried by Senate President Pro Tempore Don Perata, D-Oakland.

Californians owe about $53 billion in outstanding bonds that command annual payoff checks of $4 billion – or about 4.84 percent – of the state's general fund. The generally acceptable debt burden for California is about 6 percent, many fiscal watchdogs say.

Taxpayers generally must come up with an additional $60 million in interest annually to cover every $1 billion borrowed at the going fixed rate of about 5.5 percent for 30-year bonds, according to state budget analysts.

"Debt must be repaid with real money, real money that will be repaid not only by ourselves, but by our children and, in some cases, grandchildren," Jon Coupal, president of the influential Howard Jarvis Taxpayers Association, wrote in a recent column.

Pressed by reporters several times over the past few weeks, the governor has never corrected persistent speculation that he is considering a bond of record size, $50 billion or more.

"I'm not trying to (hide) it from you," Schwarzenegger said when asked to confirm the figure. "But we are looking, like I said, at something really big. It could be much, much larger than you're talking about."

Schwarzenegger has invoked the legacy of visionaries such as Gov. Pat Brown, who presided over a massive expansion of universities, water systems and freeways.

"It's time to build a California for tomorrow," he said.

But Perata said "the governor is trying to do a little bit for everybody" in a far-reaching bond. Negotiators need to narrow the list, he suggested, or important election-year allies could be scared off.

"My reading from the business community is that would be the last thing that would prove to be productive," Perata said of a scattered bond package.

For now, leading Democrats and Schwarzenegger are independently pursuing measures. Assembly Speaker Fabian Núñez, D-Los Angeles, has tossed into the mix a still-sketchy school bond.

"Just to keep up the pace, we need $8 billion to $10 billion and this is just K-12. The need is vast," Núñez said.

Schwarzenegger and lawmakers hope to strike a deal so they can go to voters united, perhaps as early as June.

With the wounds of the divisive special election still fresh, compromise could be a challenge. It takes a two-thirds vote of the Legislature – or a voter initiative – to place bonds on the ballot, giving minority Republicans more clout. The governor must sign any bond measure produced by the Legislature.

"This will be the proving ground for the governor wanting to work together," Perata said.

Conceding that sizable bond debt repayments could stress state funding of other important services, Perata said it's time to require contributions from those likely to benefit from some of the construction.

"There has to be an alternative revenue source," he said. "It has to be either a user fee or some general taxation."

Some fiscal conservatives are not automatically dismissive of new fees, as long as those being charged see direct benefits.

"I will not rule it out," said Coupal of the Howard Jarvis organization. "But the issue for us is making sure there is a very close connection between the fee and the activity."

State transportation officials estimate there are about $2 billion of unfunded projects ready to go.

Beyond what the governor and legislative leaders have talked about, proposals have been floated to remodel courtrooms and jails, improve water quality, buy open space and curb smog. Combined, those proposals could add $25 billion more to the state's IOUs.

"These are five-star priorities," said Perata of his focus on infrastructure and education. As for the other proposals, while important, "it's not their turn," he said.

Perata said he will push for a package that promises little state interference and incentives to build housing close to public transit. He also proposes to give priority to unfunded projects that are ready to go.

"I want it to be just like instant pudding: Just add milk, or in this case, money," he said.

[NormsRevenge]

Democrats' $10.3 billion bond package:

$2.5 billion for highways, railroads and ports with an emphasis on speeding up the movement of goods. The account also could be used to replace sooty diesel engines used at ports and improve harbor security

$2.3 billion to restart projects that have been stalled because the state diverted a large share of transportation funds to other uses

$1.5 billion to local roads and public transit

$1.2 billion to shore up California's 1,600 miles of levees and help with local flood protection

$1 billion to prepare for high-speed rail lines, with a caveat that the investment be used for dual projects to improve current passenger and rail cargo programs at the same time

$975 million for grants to promote affordable housing and other development, mostly in city centers suffering from ground pollution called "brownfields" and blight

$800 million mostly for local projects, such as encouraging development near transit stations, neighborhood streets and bike trails

Other pending bond proposals:

Education: $6 billion to $8 billion for various building programs to benefit K-12 classrooms and college campuses. Assembly Bill 58

Hospitals: $5 billion for seismic safety. The governor might fold this allocation into his broader package. Assembly Bill 1046 and Senate Bill 491

Resources: $3.9 billion for parks, coastal protection and other conservation programs. Senate Bill 153

Air quality: $2 billion to $5 billion to curb smog, including replacing old diesel engines, scrapping high-polluting vehicles and promoting gas-electric hybrids. Bill number not assigned

Courts: An unspecified amount to improve court facilities. Price could reach $10 billion for the top 183 projects listed. Senate Bill 395

Jails: No amount specificed and no final measure submitted. Six years ago, the state Department of Corrections estimated a need of 55,000 more beds in adult prisons and 6,000 more beds in juvenile facilities. Bill number not assigned

[ElkGroveDan]

... their bond package of unparalleled scope could raise $50 billion or more to speed commuters home, quickly move imported goods from ship to store, modernize campuses, build power plants, provide affordable housing, make hospitals safe from earthquakes and repair aging levees that guard homes, farms and drinking water.

Gosh if a $50 billion bond will do such wonders for our state, why stop there? Why not $100 billion so we can cure the common cold, obliterate warts and buy happiness? After all it's just a bond. It's not a tax so it won't cost us anything.....will it?

[Malesherbes]

"quickly move imported goods from ship to store." Great, now how about moving some more EXPORTED goods from our factories to the ships to help pay for all the imported goods.

[anonsquared]

BETTER IDEA...

All state workers take an immediate 35% pay cut.
All state workers pay $1000. health care deductible and contribute half toward their premiums.
All state workers get a matching 401K for their retirement instead of the 90% of their pay they get now.

IN OTHER WORDS, all state workers get the same deal the rest of us get in the REAL WORLD and we can FORGET THE BOND and pay for all of that stuff with the taxes and fees already collected.

[Steely Tom]

I'll bet this will be a big hit in California, the "High IQ" state. They just love higher taxes and ever-growing long-term debt out there. They're so smart!

[The Spirit Of Allegiance]

"If we are not bold, how can we meet the challenges of the future?" Schwarzenegger told a recent gathering of county leaders public servants/drones/pawns.



PRIVATIZE and CUT SPENDING!
That's how. Thanks for asking, Arnie. Glad to help.

Signed,
One of your Constituent-Employers

[kellynla]

instead of the "13 Percent Solution" we have the FIFTY BILLION DOLLAR BOONDOGGLE!

I hope all you Schwarzenegger fans are happy!
but it's all the CA conservatives' fault. LMAO

[tophat9000]

Californian...Say NO to SacraMento Bondage

[calcowgirl]

If approved by voters next year, their bond package of unparalleled scope could raise $50 billion or more to speed commuters home, quickly move imported goods from ship to store,

Looks like that China trade mission had an alternative purpose. My guess is they will be part of the creative financing being discussed for "public-private partnerships." That would explain why the China mission included a bunch of NY bankers and his buddy Paul Wachter.

...modernize campuses, build power plants, provide affordable housing, make hospitals safe from earthquakes and repair aging levees that guard homes, farms and drinking water.

Enforce the immigration laws and there will be plenty of affordable housing available.

Beyond what the governor and legislative leaders have talked about, proposals have been floated to remodel courtrooms and jails, improve water quality, buy open space and curb smog.

Agenda 21 followed by the hydrogen highway. Now those are pressing needs! /s

[hedgetrimmer]

$2.5 billion for highways, railroads and ports with an emphasis on speeding up the movement of goods

This is to further the goal of a complete merger with Mexico, called the North American union. See the threads on the trans-texas corridor if you are interested in learning more.

[hedgetrimmer]

China has mastered the concept of "public-private partnerships." The Chinese communist government owns up to 50% of all corporate enterprises. Its a great way to raise money for government, fuel the fires of corruption and graft and keep those pesky constitutents in the dark and out of power.

[Syncro]

NO MORE TAXES!

That 6 billion for stem cell research was the epitome of waste.

If California Politicians cut out all the pork and waste, we would have a fixable situation here.

[Mr. Jeeves]

CA: Governor pushes 'really big' bond to remodel state

How about a "really big" tax refund, along with the message: "Citizens, go remodel your state."

Oh, I forgot. Our betters don't trust us to "spend it right". ;)

[Digger]

I have no idea about the next election but I cannot believe that he will win the republican nomination. It's embarrassing that he be called a pubbie.

[kellynla]

and don't forget if the illegals in CA prisons(who account for ONE THIRD of prison population) were deported; not only would prison costs decline but it would also open up slots for the American perverts and other felons who are roaming about the state unabated!

[The Spirit Of Allegiance]

How about a "really big" tax refund, along with the message: "Citizens, go remodel your state."

---

How about a really big BUMP! and amen to that.

[kingu]

Dear Arnold,

While it is better that you and the legislature are considering asking the people, the reality is that you were elected to improve the state economy, cut spending and hold the line on taxes.

Cargo movement problems? Have the folks moving the cargo propose solutions and pay for them. You and the legislature can help push through what legal support is needed.

Hospitals need to be upgraded? They should pay for it. Congestion a problem? Have regional boards come up with a solution, the method to pay for it, and offer your support.

Get the idea here? Sacramento has zero answers for anyone. No bonds. Now, get back to your job and cut the spending!

(of course this is me just pretending that the legislature would back any cuts, or that Arnold would propose any. We're still better off than having Davis in office.)

Signed
A Very Tired Conservative

[cynicom]

Ahnuld could do the same thing with no cost if he chased the hogs away from the tax trough. Being another big spender, he wont do that.

[Czar]

In other words, Arnold is doing everything under the sun except what we elected him to do in the first place.

Guess he hopes to bank enough credits doing that to try and eke out a win in the next election.

Ain't gonna work. Absent some kind of miracle and turnaround, the votes simply aren't going to be there.

He's as bad as Gumby.

[SierraWasp]

"improve water quality"

Oh! I'm just so excited!! I have no doubt that he's talking about the long stalled, 2/3rds finished reservoir above Folsom reservoir to help keep the bay-delta flushed out to save the delta smelt, right? /dripping sarcasm