It didn’t take long for the dollars-and-cents reality of
California’s budget woes to hoist a barrier to Gov. Arnold
Schwarzenegger’s plan to put a $15 billion debt consolidation bond
on the March ballot.
It came from Proposition 55, a $12 billion school construction
bond already on the ballot. Pair it with the deficit-reduction bond
and the state would be asking voters to approve $27.3 billion in
debt
– before interest.
It didn’t take long for the dollars-and-cents reality of California’s budget woes to hoist a barrier to Gov. Arnold Schwarzenegger’s plan to put a $15 billion debt consolidation bond on the March ballot.
It came from Proposition 55, a $12 billion school construction bond already on the ballot. Pair it with the deficit-reduction bond and the state would be asking voters to approve $27.3 billion in debt – before interest.
Not only is that too much, it’s twice the debt any state has ever asked voters to approve. The current mark, $13.5 billion, also belongs to California. It was the first half of the two-part, $25 billion school bond we’re being asked to finish in March.
Assemblyman Ray Haynes, R-Temecula, says rightfully that $27 billion “would put both bonds at risk if you put them on the same ballot.” The state’s deficit should get preference. Haynes proposes to temper voter “sticker shock” by having the Legislature move the school bond back to November and leave the $15 billion deficit bond – a new record – as the state’s main measure in March.
Couple it with local and regional measures, however, and it will still give cost-conscious citizens considerable pause. A $1 increase in Bay Area bridge tolls – to raise $125 million a year for transportation – is already on the ballot.
If passed, however, Schwarzenegger’s $15 billion bond won’t erase the state deficit. Before the inauguration, his people floated the idea of a $20 billion bond, but trimmed it back. And, it deals only with accrued debt – not a dime of next fiscal year’s anticipated $14 billion shortfall.
That reinforces concern about the continuous passage of bonds that add to our state’s mounting debt. Treasurer Phil Angelides said last year there was room to add to the debt, but now says the state is at its limit and the current tab requires payments that exceed 6 percent of the general fund, a benchmark for financial experts.
After all, bond funds are not “miracle money.” Over 30 years, the amount we repay will double and cost $2,637 per household. Over 15 years the toll is $1,805.
How do we deal with next year’s $14 billion deficit? The governor and Republican lawmakers painted themselves into a corner by eliminating taxes – an important tool for dealing with financial crises. Such fiscal fundamentalism reduces flexibility, puts the burden on program cuts or internal money-shuffling akin to what Gov. Gray Davis and the Legislature used the past two years. It is, as Yogi Berra said, “deja vu all over again.”
