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Reposted from the Sacramento Bee
March 2, 2007

Big bonds just a drop in bucket

By Dan Walters - Bee Columnist

Four months after California voters crossed their fingers, held their breath and approved $42 billion in bonds to repair and expand California's long-neglected highways, levees, parks and other forms of public infrastructure, politicians and bureaucrats are beginning to spend the money.

The California Transportation Commission this week allocated $4.5 billion in transportation bond funds for highway congestion relief, and legislators began work on appropriating billions more dollars in river levee repair funds.

The infusion of bond money after a decades-long public works drought has rekindled regional rivalries and touched off a feeding frenzy among lobbyists as they tout specific projects to politicians and their appointees. The syndrome has been most evident in transportation, designated for nearly half of the bonds.

The Transportation Commission staff proposed a $2.8 billion list, winnowed from $11.3 billion in congestion relief projects touted by the Department of Transportation and local transportation agencies, but was quickly engulfed in a firestorm of political criticism.

Urban legislators and Gov. Arnold Schwarzenegger complained that the list omitted high-profile projects that they had promised voters, such as new carpool lanes on the very congested Interstate 405 freeway in Los Angeles. The CTC staff quickly reconfigured the list, adding the projects with political juice and bumping it to $4.5 billion, all the bond contained for that category.

As the CTC was bowing to political pressure, a state legislative committee was grilling Lester Snow, the state director of water resources, on how the levee bond money would be allocated, and some of the same regional complaints began to surface -- especially moans from Southern California interests that too much money was going to levees in Northern California.

The sharp competition reflects a larger dilemma, which is that the $42 billion in bonds, as impressive as it sounds, is just a relative drop in the bucket of what California needs to repair and reconstruct facilities that have been stressed by overuse and under-maintenance and to expand to meet ever-rising demands from an ever-increasing population.

When California more or less stopped building infrastructure, especially highways and water facilities, three decades ago on the mistaken assumption that its growth was slowing (an "era of limits," then-Gov. Jerry Brown proclaimed), the state had about 22 million people. Now it has more than 37 million and is adding human beings at the rate of 5 million-plus a decade.

Both transportation and water officials are blunt about needing infinitely more money -- perhaps 10 times as much in the case of highways -- to do what's required. And in his State of the State address in January, Schwarzenegger called for doubling up on last year's bonds during the next couple of election cycles as part of a long-range infrastructure improvement program that could reach a staggering $500 billion.

There is, however, a gigantic problem with merely continuing to borrow money. As it is, California is approaching the prudent level of debt that must be repaid out of the state's general fund, like last year's bonds, and the budget is already running multibillion-dollar annual deficits.

If California is to do what's needed, it must adopt other financing vehicles, such as raising gasoline taxes, imposing fees on property protected by levees and/or going into partnership with private companies to build and perhaps operate projects.

Any one of those alternatives generates huge political impediments, such as Republicans' pathological fear of taxes or unions' equally unbending opposition to privatization. In the end, however, it's a choice between doing it differently and not doing it at all.

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