Sadly, Prop. 1A Is Needed : Bonds are required because state rejected pay-as-you-go method

Much of the $9.5 billion in federal earthquake recovery aid allocated to California since Jan. 17 is contingent on the state’s paying part of the costs of repair and retrofitting. For example, California is responsible for 10% of the costs for repairing or rebuilding schools and other public buildings, utilities and streets and roads damaged in the Northridge quake, and 25% of the costs of upgrading public buildings in Los Angeles, Ventura and Orange counties to withstand seismic shaking. Proposition 1A, a $2-billion bond issue on the June ballot, would provide funds to meet these and other earthquake-related needs. Is the money needed? Of course, without question. Is yet another general-obligation bond issue the best way to provide funds? Decidedly not.

The clearly preferable way to pay for earthquake repair is a small, temporary increase in the state sales tax and a small, temporary boost in the state gasoline tax. That is the course we urged earlier this year. It is the option that Gov. Pete Wilson and the Legislature recoiled from in political horror. So now, instead of a fiscally sound and low-cost pay-as-you-go method of financing needed work, Californians are being asked to approve a bond issue that, when estimated interest is taken into account, would cost taxpayers not $2 billion but about $3.6 billion over the anticipated 25-year life of the bonds.

Does it make sense? No. It pushes debt off into the next generation even as it needlessly raises California’s total bonded indebtedness, with a potential adverse effect on the state’s bond rating and the interest it must pay to sell its bonds. Noting that, California is still left with the urgent need to finance its share of earthquake repair and hazard-mitigation costs. This measure is now unhappily the only feasible way to do that. In the face of that compelling necessity, we reluctantly recommend a “yes” vote on Proposition 1A.