Democrats Have Own Rebuilding Ideas

The Legislature’s Democratic majority is preparing to jettison whole sections of Gov. Arnold Schwarzenegger’s plan to rebuild California’s public works, including expansion of jails, renovation of courthouses and miles of highway upgrades.

Democratic leaders said they intended to substitute their own priorities, which include building affordable housing, cleaning up polluted urban areas and renovating hospitals to protect them from earthquakes.

Unnerved by the proposal’s price tag, they also may halve the $68-billion debt to state taxpayers that Schwarzenegger wants to spend mending and adding to 10,300 miles of roads, repairing dilapidated public buildings, shoring up aging levees and bolstering other infrastructure. The governor’s plan to expand highways in fast-growing suburban areas would probably be downsized.

Schwarzenegger’s fellow Republicans, implicitly tagging their party leader’s plan as fiscally irresponsible, also want to limit borrowing.

“I’m open at looking at how deeply [Schwarzenegger] wants to invest here,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “But I do think he went too far, and I think we have to scale that back significantly in order to make a manageable and smart investment in infrastructure.”

Richard Costigan, the governor’s legislative secretary, said lawmakers’ narrowing focus may undermine Schwarzenegger’s intent, as he said in his recent State of the State address, to rise above the kind of planning in which “California has invested piecemeal, crisis by crisis, traffic jam by traffic jam.”

“We have spent over five election cycles -- 10 years -- $40 billion-plus in bonds, and there’s never been a comprehensive approach,” Costigan said in an interview. “Do you want history to repeat itself?”

Lawmakers from both parties have embraced the governor’s call for an ambitious public works program. All sides need something to show voters before the fall election.

And there is wide agreement that the state’s long-neglected roads and ports need improvement to ease the movement of goods. Democratic leaders proposed their own public works packages last year, but Schwarzenegger asked them to hold off.

A poll released this week by the Public Policy Institute of California found that 65% of the electorate would back a $25-billion infrastructure bond. Schwarzenegger envisions borrowing as the first stage of a decade-long plan that would also tap federal money and other sources to spend $222 billion on the state’s physical foundations.

Legislators are racing to make a March 10 deadline for placing a completed package before voters in the June primary election. But the complexity of the task, and potential conflicts ahead, make the November ballot more likely.

That could find Democratic legislators campaigning with Schwarzenegger for passage of their bond measures at the same time they are urging voters to vote against him in the gubernatorial race.

Meanwhile, a number of disagreements threaten to bog down negotiations. One is how to finance all the building. Assembly Republicans this week proposed paying for $35 billion in construction over the next decade from the state treasury instead of borrowing for it. Democratic leaders quickly dismissed the idea as unworkable without substantial sacrifices in other areas of state spending.

GOP lawmakers want to ease environmental restrictions on construction, give builders more say in how transportation projects are designed and allow building without union-level wages.

All are subjects the Legislature has sparred over in the past. Though Republicans are the minority, bond measures require support of two-thirds of the Legislature, and GOP votes are needed to pass them and put them on the ballot. Republicans, who don’t share all of the Democrats’ priorities, are insisting that they play a central role in shaping the plan.

Rifts are also widening over topics that all sides agree should be included. For example, Schwarzenegger wants to spend $2.6 billion on public charter schools, a sum many Democrats consider excessive.

The governor’s proposal also includes new roads in traditionally Republican suburban areas; Democrats want to spend more transportation money in urban areas, where most of their constituents are.

A power struggle has begun over how much authority the Schwarzenegger administration should have in choosing which projects to fund, and over what role lawmakers would have in supervising the spending. Under the governor’s plan, for instance, $2.5 billion would be spent on water projects without ever going through the Legislature.

“The governor’s plan basically says, ‘Give us the money; we’ll get back to you on how we’ll spend it,’ ” said Senate President Pro Tem Don Perata (D-Oakland).

Lawmakers from both parties are displeased that the governor wants to sidestep the existing formula that allows counties to decide how to spend 75% of the state’s transportation money. Legislative officials complain that the administration is not sharing all of its plans, including where the governor wants to place private toll roads.

Democratic leaders have offered alternative plans that give legislators more control over how the money would be used. Perata’s proposal would spend $1.4 billion on affordable housing, especially in urban areas; $400 million to replace dirty diesel engines at the state’s ports; $775 million to clean up polluted urban buildings and encourage rebuilding in cities; and $125 million to make bridges earthquake resistant, among other things.

Nunez has a plan that includes many of those goals, as well as new housing for farmworkers, money for seismic retrofitting for hospitals that serve the poor and funds for emergency public safety communications equipment. He also favors borrowing $9.4 billion for school improvements, less than the governor’s plan but done more quickly.

Schwarzenegger envisions building of a historic scope, but some Democrats fear the huge debt the state would assume for it. Over the next decade, annual payments on California’s debt would grow from $3.9 billion this year to nearly $9 billion.

Those obligations “would crowd out a variety of other priorities in the budget: education, healthcare, the range of human service programs for families and seniors,” said Jean Ross, director of the California Budget Project, a Sacramento nonprofit organization that monitors state policy for the poor.

The administration projects that revenue from a strong economy will more than compensate for the debt.

Legislators also are concerned that Schwarzenegger’s plan may take too long to show results and could lock future lawmakers into decisions that might not make sense a decade from now. The governor wants to issue five rounds of bonds over the next 10 years.

“I think it’s important if we are going to get a consensus on the bond that people see something happening right away,” said Senate Republican leader Dick Ackerman of Irvine.

Lawmakers are less confident than the governor that voters will embrace large-scale borrowing.

“The governor’s proposal has not yet been pulled through a political prism,” Perata said. “We know voters have certain preferences. They don’t like money for jails because they don’t think that’s important in their lives. They’re not very excited about building courthouses because most of them think Judge Judy has a very fine courthouse.”

But administration officials said they are confident a compromise can be reached.

“It’s not as though anybody’s saying, ‘No, we won’t do that,’ ” said Costigan. “Everybody’s pretty much in agreement. They’re kind of picking our stuff apart, and righteously so.... They’re finding issues that are important to them and their constituencies.”