$2.9 Billion in Bond Issues OKd by Senate

The Senate on Thursday approved $2.9 billion worth of bond issues for next year’s ballot, including a $1-billion bond financing proposal for highway construction advanced by Gov. George Deukmejian.

The Republican governor’s transportation proposal went to the Assembly on a bipartisan 27 to 8 vote over the protests of some Democrats who complained that the governor handed them “the only game in town.”

Other bond issues approved would finance construction of public schools, protection of wildlife habitat, jail facilities for juvenile criminals, libraries and higher education construction.

Other bond issues are also pending in the Assembly, and more are expected to be acted on next week by the Senate. Before they reach the ballot, many will be scaled down in negotiations between the governor and legislators.

Deukmejian has said he intends to propose a second $1.3-billion highway bond issue for the 1990 ballot.

The Republican governor adamantly opposes an increase in gasoline taxes and other motor vehicle-related fees to finance highways, the traditional way Californians pay for transportation projects. If Deukmejian’s plan is approved, it would be the first time in modern California history that major highway construction was financed by anything but highway “user fees,” such as the gasoline tax.

By using bond money for transportation programs--with repayment of principal and interest financed by general taxes--state government can avoid spending that counts against the voter-imposed 1979 limitation on government expenditures. Bond financing costs more than raising the money with taxes, but it is exempt from the limit.

‘Only Solution’

Sen. Wadie P. Deddeh (D-Chula Vista), legislative author of Deukmejian’s program and chairman of the Senate Transportation Committee, told the Senate that he would rather offer a gasoline tax increase. However, he said, he carried the governor’s program “not because it is the best solution, but it is the only solution available to us today.”

Deddeh, who said the bond funds would be spent for state highways and local streets and roads, acknowledged that the $1 billion would fall far short of meeting transportation needs.

The senator and others deplored the current “transportation crisis” where traffic gridlock has become a way of life in many urban areas, freeways are pushed beyond their capacity and potholes erode local streets and highways.

But Sen. Gary K. Hart (D-Santa Barbara) noted that the Deukmejian proposal would consume $1 billion of the $2.9 billion approved by the Senate in bond issues on Friday.

Voiced Concern

Hart, author of a $600-million bond measure for higher education construction, voiced worry over how other bond issues would fare in competition with the governor’s program when they are eventually negotiated with the Assembly and Deukmejian before appearing before voters next year.

Last year, Deukmejian permitted a maximum of $2 billion worth of bond issues to go before the voters. At the time, Deukmejian expressed concern that the addition of any more bonds might cause voters to reject them all.

“This is the first time that we are going the government obligation (bond issue) route to fund transportation needs in the state of California,” Hart said. “We have a whole set of competing bond measures.”

Hart implored his colleagues “not just to capitulate” and vote for the governor’s plan. But Senate President Pro Tem David A. Roberti (D-Los Angeles) said he saw “no other option.”

“It is impossible to move in Los Angeles any more,” he said.

‘Worked Well’

Sen. John Garamendi (D-Walnut Grove), another opponent, argued that gasoline and diesel fuel taxes and truck weight fees have “worked well” to finance highway transportation in California. He said financing the repayment of the bonds from the taxpayer-fed general fund “would take away from other critical needs we have.”

Senate transportation advisers noted that the Administration proposes to retire the bonds as quickly as possible to minimize interest costs. If the bonds were retired over three years at 7% interest, debt service would total about $1.13 billion. This compares with $1.7 billion if the bonds had a more common life of 20 years.

Other bond issues approved included:

- $800 million for construction and reconstruction of elementary and secondary school buildings, authored by Sen. Marian Bergeson (R-Newport Beach).

- $600 million for higher education building construction, rehabilitation and site acquisition, authored by Hart.

- $250 million for building and remodeling state and local juvenile detention facilities, authored by Sen. Robert Presley (D-Riverside).

- $250 million to build new library buildings and remodel existing ones, authored by Sen. Barry Keene (D-Benicia).

- $85 million to acquire land to enhance wildlife habitat for threatened, endangered or protected species, authored by Presley.