Posted on 12/21/2005 9:46:44 AM PST by NormsRevenge
SACRAMENTO — The governor and lawmakers plan to make 2006 the year of infrastructure bonds, but the state treasurer warned Tuesday that California already has $17 billion in unused bonds for projects that have been delayed by staffing shortages, bureaucratic red tape and other woes.
Phil Angelides said it is "critical for the state to accelerate the delivery of the bond-funded state projects and programs that have already been approved by the Legislature and the voters but not built or completed."
Aides to Republican Gov. Arnold Schwarzenegger, who is seeking re-election, downplayed the problem, which Angelides, a Democrat running for governor, emphasized in a news conference to release his annual report, "Smart Investments."
The treasurer's report came on the eve of a coalition of construction firms and unions unveiling their ideas for smart infrastructure investments, ranging from roads to river levees.
Both events are part of the political and fiscal infrastructure stew that will likely boil over during the 2006 legislative session and elections.
Schwarzenegger and the Democrat-controlled Legislature are separately developing proposals for new bond measures and other funding mechanisms to begin meeting about $100 billion in infrastructure needs.
A senior legislative official said during a background briefing on infrastructure that "we do have a lot of outstanding bonds that have been authorized but haven't yet been sold."
"But if you look at what we have, a lot of the money has been earmarked," he said.
Nevertheless, the official acknowledged that preparedness is a key factor.
He said Democratic Assembly members will be asking the question: "How well is the administration ready to capitalize on any kind of bonds that are approved by the public?"
Angelides said state agencies have been slow to carry out bond-funded projects, in part, due to staffing reductions.
Coincidentally, as politicians look toward construction and refurbishing of infrastructure, several of the Legislature's most knowledgeable transportation analysts have retired or moved on to other jobs.
The treasurer also pointed to the governor's own California Performance Review, which reported on infrastructure woes last year.
"California lacks an integrated infrastructure policy, infrastructure projects are not centrally managed or coordinated, infrastructure investment lacks stable funding and multiple agencies involved in infrastructure make it difficult to complete projects," it concluded.
Angelides also pointed out that the Schwarzenegger administration has failed for two years to provide a mandated, comprehensive overview of infrastructure needs and priorities.
Administration officials said they are working on that plan as part of the proposals Schwarzenegger will unveil next month in his State of the State address and 2006-07 budget.
The treasurer also said that California's budget, which spends $4 billion more annually than it takes in, should be balanced before launching the infrastructure improvement plan.
In addition, he said, $3.5 billion, which has been borrowed from transportation funds to help balance the deficit-plagued budget in past years, should be repaid before proceeding.
The simple fact is that the ecoomy is booming. Everyone who wants to work is working. The only potential labor supply is immigration.
But where is the motivation to put a state further in debt? He in Illinois, the bi-partisan combine of those who control both political parties receive lucrative welfare as consultants to bond deals. There is resistance to raising taxes to pay for the rate of increase in spending, which is 5 or more times greater than the rate of inflation.
But borrowing on bonds is obscure to most of the public. So the rich welfare recipients are paid up front hefty consulting fees for unnecessary bonds. The taxpayers then must pay both interest on the money borrowed, and interest on the big consulting fees.
States could quickly reduce their expenses, and the expenses of local government, but selling their bonds on ebay or an ebay type site.
One of you internet savvy entrepreneurs should sell a state on it.
Review treasurydirect and mutual fund family websites. Then remember that states and their sale of bonds cannot be regulated by the Feds. Then
develop a site that sells bonds in denominations of $1,000 and $10,000 and up to the millions.
Develop and sell ladders of bonds whose maturity is staggered over several years.
Develop packages of bonds from various state and local agencies that spread the risk and create diversification of the bond portfolio.
Sell ads to Fidelity, Vanguard, etc on the sidebars. Voila! the state has a way to sell the bonds with 100% of the money going to the union member working the back end of the asphalt truck. Not one dime of taxpayer money need be wated on pinstripe welfare to the buggywhip function of lawyers, consultants, brokers, etc. It is a win-win for the person who develops this software product, for the state government, for the taxpayers, for the workers who actually provide a useful service. The only losers are the parasites on pinstripe welfare.
Given the proclivity of the California legislature, I'd bet that the delay in spending the money is because they're still trying to figure out how to steal it and blow it on things other than the intended use.
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