Unsold Bonds Raised as Issue in Treasurer Race

Waking up the quiet race for state treasurer, Democrat Kathleen Brown on Wednesday accused incumbent Republican Treasurer Thomas W. Hayes of delaying numerous public works projects by moving too slowly to sell $7 billion in bond measures approved by voters.

Noting that voters are being asked to approve another $5.1 billion in bonds in the June primary election, Brown told a group of Times reporters during a breakfast interview that Hayes has not “taken an aggressive enough approach” to selling the state’s bonds.

“The treasurer ought to be leading some sort of effort to determine why the bonds aren’t being issued. If they aren’t needed anymore, then we should be cleaning them off our books,” she said.

Hayes conceded that he is waiting to sell $7 billion in bonds approved by voters over the last 16 years. But the treasurer, who is running for his first full, four-year term after being appointed last year by Republican Gov. George Deukmejian, suggested that nothing short of catastrophe would result if the state suddenly moved to sell the bonds.

Selling bonds faster than he has been doing, Hayes said, would “cost the state billions” in higher interest costs, jeopardizing the tax-free status of California’s bonds and threatening the state’s AAA bond rating. He said it would also rush massive school, water and prison construction projects before they are ready to leave the government planning incubator.

Bonds, usually paid off over 20 years, are the state’s traditional means of financing long-term building projects.

Brown, who spent the day making campaign stops in the capital, seemed eager to shift what promises to be a long and bruising campaign for state treasurer into high gear.

The daughter of former Gov. Edmund G. (Pat) Brown and sister of ex-Gov. Edmund G. Brown Jr., the Democrat will face Compton City Treasurer Wesley Sanders in the June primary. But Brown clearly is looking toward the general election in November, taking swipes at both Hayes and his Republican primary opponent, Angela (Bay) Buchanan, a former U.S. treasurer under President Ronald Reagan.

Brown described Buchanan to Times reporters as “an Orange County gal” who is off base in criticizing other candidates in the treasurer’s race for accepting campaign contributions from financial interests.

Noting that Buchanan raised money for Reagan and Bruce Herschensohn, an unsuccessful Republican candidate for the U.S. Senate in 1986, Brown said the GOP candidate “had a midnight conversion” on the contributions issue for “political purposes.”

But Brown, who was an elected member of the Los Angeles school board during the 1970s and more recently a Los Angeles public works commissioner, spent most of her time talking about her differences with Hayes, who served as the Legislature’s chief auditor before being appointed treasurer by Deukmejian. She drew Hayes’ background as a career civil servant into her remarks at every opportunity.

Speaking to the Sacramento Press Club, Brown said, “When you put on the green eye shade and you start saying you cannot issue more than X billion dollars of bonds, you begin to ignore two things. One, what is the need? And two, what is the public telling you? The treasurer is an elected official and not a civil servant. The treasurer is there to solve problems and to respond to the public.”

Brown, poking some fun at herself, said she had three key assets as a candidate: She is a woman, a Democrat and a Brown. Each, she said, would help her win votes. Then she got a laugh from members of the Press Club when she outlined her three main liabilities: being a woman, a Democrat and a Brown.