Kathleen Brown Sees No Easy Solution to Backlog of Bonds

Treasurer-elect Kathleen Brown, who hammered defeated Treasurer Thomas W. Hayes in her campaign for failing to quickly clear a nearly $12-billion backlog in voter-approved bonds to build schools, jails and other public facilities, acknowledged Thursday that “you are never going to totally eliminate the backlog.”

The newly elected treasurer said that because of the complexities of bond financing, it could take five years or more to sell all the bonds that have been approved by voters--and even then, Brown acknowledged, they all may not be issued.

“You can’t issue them all at once,” Brown said during the interview, sounding much like Hayes did when he tried to counter her criticism during their campaign.

Pressed on just how many bonds will be marketed this year, Brown said she was uncertain, but that she was looking at “a goal of $2 billion to $3 billion.” Hayes marketed a record $3 billion in bonds last year.

Last fall, Brown frequently drew attention to the backlog, which was created by record numbers of bond measures approved by voters in recent elections. Bonds allow the state to raise huge lump sums of money at one time and pay them off over 20 years.

Although Hayes issued a record number of bond measures last year, the backlog grew because voters approved $5 billion in new bond measures--also a record--during the June, 1990, election.

Brown, who will be sworn in as the new treasurer Monday, used the growing number of approved-but-unissued bonds as a basis for radio and television commercials. “Voters are frustrated with government’s inaction,” she said. In a fund-raising solicitation, she said of Hayes, “Thanks to him, we now have a backlog of over $12 billion in voter-approved bonds that are gathering dust in the treasury.”

Brown, during the interview in her office, said she hopes to see a commission created through legislation that will review the state’s need for major bond financing and make recommendations.

In the meantime, she said, she will take a “wait-and-see” approach. She said considerations are how much in new bond measures “the (financial) market will bear,” and, given the state’s worsening budget problem, how much “the state can afford.”