CA: Credit addiction - Governor's goals sound, not his borrowing

San Diego Union - Tribune ^ | 1/10/07 | Editorial

[NormsRevenge]

It is difficult not to be seduced by the vision for California outlined by Gov. Arnold Schwarzenegger in yesterday's State of the State address.

If taxpayers just borrow more money, he said, the state could fix its crumbling roads, boost its dwindling water supply, jail every criminal, build more schools and lead the world in just about every important industry. And, for good measure, let's reform corrupt gerrymandering and mandate health insurance for every resident.

Whew. California has neglected, postponed and gridlocked its way into a host of major problems. Clearly, this is a governor with great imagination and considerable determination, and now he promises to fix it all – without sacrifice, without pain.

Well, so much for Schwarzenegger's great seduction. A glance at the state's balance sheet shows that our credit card is nearly maxed out. Voters have already authorized about $88 billion in infrastructure borrowing. For perspective, this year's general fund budget is $101 billion, and it includes $7 billion in deficit spending.

Yet, despite running deficits in an economic boom, the governor now wants California to borrow a staggering $212 billion over the next decade for infrastructure, much of it in the form of general obligation bonds. In other words, tomorrow's taxpayers would pay for today's lack of political will to cut less essential spending.

This is not to say we disagree with Schwarzenegger's central priorities. But taxpayers can't abide an addiction to credit.

For example, the governor wants to borrow $4.5 billion to build new dams and underground reservoirs. California's growth, coupled with predictions of a melting snowpack due to global warming, makes expanding storage the key to future water supplies. But taxpayers would be on the hook for $2.5 billion of the total. Water consumers should pay through higher bills, an approach that encourages conservation far better than boondoggle recycling and incentive programs.

Similarly, the state must attack traffic congestion with new roads. Voters approved $20 billion in transportation borrowing in November. Few details were available yesterday, but the governor wants $17 billion in short-term additional spending using public/private partnerships. If the plan is heavy on toll roads and other fee-based strategies to accelerate construction, we're all for it.

And nobody doubts that California's prisons are bulging at the seams. But the governor wants to sneak $9.5 billion onto the credit card without a vote of the public. The state may need to spend this sum, but not before forming a sentencing commission and publicly debating the costs.

Also questionable is the governor's call to borrow $23 billion to build 15,000 classrooms and renovate 40,000 classrooms. The student population is leveling off as spending is projected to increase, so why borrow?

And we are deeply skeptical about Schwarzenegger's executive order to reduce the carbon content of fuels. Climate change is real, but the technology for energy-efficient ethanol production is years away. Fuels that are unique to California block competition and hand refiners license to gouge consumers with higher gas prices.

In each case, the governor would lead the state in the correct direction, but push the costs years into the future. California's budget is riddled with spending that is less important than Schwarzenegger's list of priorities. It's time to reduce nonessential spending, instead of piling up debt.

[goldstategop]

There are 2 constant rules of California politics. More Spending And More Borrowing. Its a tried and true political formula.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[secretagent]

Mandated health insurance - sounds good, except for the mandated part.

[dynachrome]

"The student population is leveling off... "
Just getting ready for the illegals and their children.