Schwarzenegger's State of the State
'I Say build it'
Bonds would help finance projects
GARY DELSOHN / Sacramento Bee 6jan2006
I Say Build It!
Gov. Arnold Schwarzenegger, in a State of the State speech dramatically less combative than last year's version, laid out a far-reaching public improvements plan Thursday that calls for spending more than $222 billion over the next 10 years. Voters would be asked to jump-start the Republican governor's proposal, which includes a variety of new fees for millions of California families and businesses, by approving $25.2 billion worth of general obligation bonds in the June statewide election.
Some of that money would help the Sacramento metropolitan area achieve 200-year flood protection, something local officials have identified as a goal for some time.
Schwarzenegger, who dropped the name-calling and harsh rhetoric that dominated last year's special election campaign, began his 23-minute speech by again acknowledging that his losing effort was a big mistake.
"I've thought a lot about the last year, and the mistakes I have made and the lessons I have learned," Schwarzenegger said. "What I feel good about is that I led from my heart.
"It's true I was in too much of a hurry. I didn't hear the majority of Californians when they were telling me they didn't like the special election. I barreled ahead anyway when I should have listened. I have absorbed my defeat and I have learned my lesson."
If the Democrat-controlled Legislature approves Schwarzenegger's plan, a far from certain prospect, voters would be asked to pass another $10.2 billion in general obligation bonds in 2008 and $18.9 billion in 2010.
"I have some concerns about making too deep a forecast into the future now," Assembly Speaker Fabian Núńez, D-Los Angeles, said after the speech, adding that he worries about tying the hands of future Legislatures. "It seems to me that it's something that needs some reflection. I'm not saying no outright, but it doesn't look very promising, at least from my perspective."
Some Republicans, such as Sen. Dave Cox of Fair Oaks, questioned how the state can afford such a massive plan.
He cautioned that it will be "extremely difficult to get enough support for the governor's proposals" unless members of his caucus are included in negotiations. Schwarzenegger ultimately will need some Republican votes as well as those of Democrats, who have bond proposals of their own.
The governor said the bond money and other public funds would be used to leverage billions in private investment, federal aid and local improvements.
"I propose a strategic growth plan for California's future," Schwarzenegger said as he addressed members of the Senate and Assembly in a speech telecast live throughout the state. "We in this chamber can lay the foundation for the next generation, just as our predecessors did 50 years ago."
In a plan that Finance Director Michael Genest said would use virtually all of the state's existing bond capacity for much of the next decade, Schwarzenegger is serving up a broad public works menu he considers crucial to accommodating California's future population growth.
As protection against taking on too much borrowing, Schwarzenegger also proposed a constitutional amendment limiting to 6 percent the ratio of debt service to general fund revenue.
"In recent decades, California has invested piecemeal, crisis by crisis, traffic jam by traffic jam. There is a better way, a smarter way, a fiscally responsible way to invest in our future," Schwarzenegger said.
For the June ballot alone, he is proposing $6 billion in transportation bonds, $12.4 billion for schools, $3 billion for flood control and water supply, $2.6 billion for public safety and $1.2 billion for courts and other projects.
"I say build it," Schwarzenegger repeated again and again as he ticked off the list of improvements that he said are needed to relieve traffic congestion, reduce air pollution, provide new schools, and build more levees, jails, courtrooms and reservoirs.
Former Gov. Gray Davis, whom Schwarzenegger pushed from office in the 2003 recall election, listened to the speech in the Assembly gallery and was largely supportive.
"I think his message is too compelling not to succeed, at least in part," he said of the public works plan. "I don't think he'll come away empty-handed. All you have to do is drive around California and you can see the traffic. ... So clearly we need to find ways to move goods and people around more quickly."
Most of the bond debt in Schwarzenegger's plan would be retired with money from the state's general fund, which pays for most day-to-day programs. But Schwarzenegger's proposal also calls for new toll roads and higher fees on companies that ship goods through the state's ports. Levee improvements would be paid for in part by assessments on landowners who benefit from increased flood protection.
Although the governor's aides noted in a briefing on the plan that Schwarzenegger is calling for no new taxes, he is proposing to raise $5 billion over the next 10 years for flood control and water supply projects.
His plan would charge residential water users $3 a month in new fees, while farms and industrial and commercial users would pay $10 a month. That's a fair breakdown, said Lester Snow, director of the Department of Water Resources, because most of the burden from new growth projected for California will come from residential users.
U.S. Sen. Dianne Feinstein was one Democrat who was enthusiastic about Schwarzenegger's plan, particularly on flood control.
"In the next 20 years, California could grow to nearly 50 million people, with a water and transportation infrastructure sufficient for half the population," she said in a statement. "This is clearly untenable, and this 10-year program is a major step in remedying the situation."
Senate President Pro Tem Don Perata, D-Oakland, said he's glad Schwarzenegger has dropped his more divisive proposals and is instead concentrating on "back to basics" issues. But he also acknowledged the mood can change quickly.
"We all know this is an election year," Perata said in a statement, "but we still have a window to get some big stuff done before the usual bickering starts."
State Treasurer Phil Angelides, who is seeking the Democratic nomination to run against Schwarzenegger in November, accused the governor of simply trying to reinvent himself so voters will find him more appealing.
"This is a question of believability," Angelides said. "After cutting our schools, raising tuition, failing to plan for investments in our future, this governor's reading from a new script. ... People should be very skeptical."
State Controller Steve Westly, Angelides' rival for the nomination, said the governor proposed billions in spending without any discussion of oversight or accountability. "Make no mistake - this isn't about a long-term plan for the state," he said in a statement. "This is the governor's try for a short-term fix for his political image."
Schwarzenegger has already made a number of policy gestures in recent days to Democrats who control the Senate and Assembly, and he alluded to them in his speech.
He wants a bill on his desk raising the minimum wage by $1 an hour over two years, he said, "so that I can sign it without delay." He vetoed minimum-wage increases each of the last two years.
Schwarzenegger and Democrats remain at odds, however, over tying future increases to inflation.
The governor said his new budget, scheduled to be released Tuesday, will add billions to kindergarten through 12th-grade education and freeze higher education fees he had approved earlier.
He called on the federal government to allow Americans to buy cheaper prescription drugs abroad, declaring, "Let the free market work."
And he challenged Democrats to work with him on a budget reform measure, noting that neither they nor the public liked his version defeated at the polls in November.
"Bring me your innovative ideas," he said. "Work with me on a new proposal. Work with me on harnessing private sector investment. Work with me to invest in California's future growth and prosperity."
While there is a lot to digest in Schwarzenegger's plan, which administration officials briefed reporters on for more than an hour before the speech, some of the state's needs were left out. Housing advocates said they were disappointed, for instance, that there was no mention of affordable housing.
"The governor missed an opportunity today," said Julie Spezia, executive director of Housing California, in a statement. "We believe that affordable homes are central to that foundation - and at the center of every strong community."
Highlights of the governor's State of the State speech: • Proposed a $222.6 billion, 10-year infrastructure plan for transportation, ports, flood control, schools, courtrooms and jails.
- Said he could accomplish goals "without raising taxes."
- Pledged support for "Jessica's Law," an initiative that would track sex offenders with GPS.
- Proposed to eliminate scheduled fee increases at UC and CSU.
- Proposed a $1-an-hour increase in the state minimum wage.
Included in the $222.6 billion in construction projects Gov. Arnold Schwarzenegger proposed in his State of the State speech Thursday is $107 billion for transportation. The governor's "preliminary working list of proposed projects" encompasses many that have been on state plans, but received no funds or minimal funds. The governor's list includes these in the Sacramento region: * High-occupancy vehicle lanes on Highway 50 and Interstates 5 and 80 in Sacramento County, $275 million.
- Highway 99 interchange at Elverta Road, $15 million.
- Highway 50 from I-5 to El Dorado County line, corridor management program, including studies, ramp metering and other strategies, $20 million.
- Interstate 80 in Placer County, park-and-ride facility at Taylor Road, $7.2 million.
- Capitol Corridor passenger train from Roseville to Sacramento - third track, $500,000.
- Highway 99 interchange at Riego Road in Sutter County, $15 million.
- Highway 99 bridge widening over the Feather River, $47 million.
- Highway 70 four-lane expressway improvement in Yuba County, $25 million.
Source: Governor's Office
source: http://www.sacbee.com/content/politics/ca/v-print/story/14043036p-14874578c.html 6jan2005