Yep. Prop 76 was all about borrowing--not spending. From the Los Angeles Times, October 24, 2005
Interviewed on public television's "California Connected" last week, Schwarzenegger said: "Look, we don't have enough money to build hospitals, … freeways, bridges. We need more energy. We need to make sure we have the cleanest environment…. We need more water, we need more of everything. And more affordable housing, which is the biggest problem of all."(snip)
But how does the state, facing a deficit projected at $6 billion next year, live within its means without raising taxes — while spending more to build things?
The governor must be a magician.
Actually, Schwarzenegger and his chief fiscal advisor, Tom Campbell, do offer answers for the money mystery. One answer is to borrow more with infrastructure bonds.
The Schwarzenegger administration is considering an ambitious bond program to fix freeway bottlenecks, improve access to cargo ports, shore up Delta levees, upgrade water facilities and quake-proof hospitals.
But the state first should get its cash flow in order, says Campbell, who's on leave as state finance director to promote Prop. 76. "We'd go to the market with a substantially better balance sheet and bond rating if 76 passes," he says. "That means lower interest."
For those from Rio Linda here's the translation.
If we can borrow an additional $5-$8B, delaying our on-paper deficit and allay the fears of the lending community by granting them constitutional protection precluding renegotiated repayment schedules for previous bonding, we'd go to the market in a much stronger position to borrow another $50B.