$5-Billion State Bond Package Agreed To by Governor, Legislature

A $1-billion transportation bond issue moved a step closer to the June 7 ballot Tuesday at the same time it was disclosed that Gov. George Deukmejian and legislative leaders have reached general accord on a record bond package exceeding $5 billion.

“We’ve pretty much reached an agreement” on the overall package that would go before voters, said Donna Lucas, the governor’s deputy press secretary. “We’re just tying up some loose ends.”

The agreement calls for raising $1.6 billion in construction funds for public schools, with an $800-million bond measure going on the ballot in June and another $800-million proposal in November. The balance of the bond sale income would be spent on construction of prisons, colleges and clean water plants, among other things.

The pact includes affirmative action goals demanded by the Democrats for firms that handle the bond sales and companies that receive state contracts funded with the bond money.

Deukmejian’s transportation bond package, meanwhile, was passed by the Assembly Transportation Committee on Tuesday in a 12-0 vote, although members expressed skepticism that the funds would even dent California’s mounting traffic woes. Several echoed committee chairman Richard Katz (D-Sepulveda), who called the measure “a small Band-Aid that will get us over an immediate hump.”

Assemblyman Elihu M. Harris (D-Oakland) was more emphatic. He likened touting the bond issue as a transit solution to giving a cancer victim a sugar pill and calling it a cure.

“Maybe you’ve done something for their psyche,” Harris said, “but you haven’t done anything for their body.”

Nevertheless, John Geoghegan, secretary of the state Business, Transportation and Housing Agency, told the committee that the Deukmejian Administration regarded the $1 billion for highway construction and mass transit as “a significant infusion of money into the system.”

William T. Bagley, chairman of the California Transportation Commission, while acknowledging that more than $1 billion for transportation is needed, remarked that “politics is the art of the possible.” He noted that the state highway system will need improvements costing an additional $15 billion to $20 billion by the year 2000 merely to keep congestion from worsening.

Democrats, led by Katz, had unsuccessfully sought an alternative $3.3-billion transportation bond proposal that would have repaid the principal and interest through the gasoline tax and fees levied on motorists and truckers. But Deukmejian held out for the $1-billion plan, which, for the first time, would use general tax revenues to make principal and interest payments.

Deukmejian’s plan also calls for a second installment of an additional $1.3 billion in bonds for transit needs to be placed on the ballot in 1990.

The June bond proposal was sent to the Assembly Ways and Means Committee. The measure was heavily amended since previously passing the Senate, so it must also return to the upper house for approval.

Although Deukmejian is in Washington attending the National Governors’ Assn. conference, his aides continued to confer with legislative aides on the overall bond package. The total amount is expected to be between $5 million and $6.1 million, about twice the previous record.

Money from bond sales is not covered by the state spending limit imposed by voters in 1979, so bonds have become an attractive way to fund critical needs. In addition to the $2.6 billion for transportation and education, $850 million would be spent on prison construction and expansion and $500 million for colleges and university construction, legislative officials said.

Further sums are to be used for toxic waste cleanup, drinking water treatment plants, shelters for the homeless, library construction and earthquake reinforcements.

Besides the Deukmejian-Legislature bond package, anti-tax crusader Paul Gann has sponsored an initiative on the June ballot that would earmark at least $600 million in general tax revenues annually to repay highway project bonds. Deukmejian is expected to oppose the Gann initiative if his $1-billion transit bond measure is put on the ballot.

Two other proposals that will be on the ballot this year would provide $510 million in home mortgages for California veterans and allocate $776 million for expansion of state and local parks.