Davis Offers Plan for $1 Billion of Surplus

With California awash in tax money, Gov. Gray Davis wants to spend $1 billion of the expected surplus on a new prison, parks and road projects, new rail cars and other public works, aides said Thursday.

Such expenditures would be the largest cash outlay for public building and rebuilding since at least the Gov. Edmund G. “Pat” Brown Sr. administration in the 1960s, the officials said.

The proposal is a sharp jump from the $195 million Davis offered for such projects when he released his proposed $78-billion budget in January. And it represents the first time in decades that California would build a prison without using bonds to finance its construction.

Today, Davis will release his revised budget for the 1999-2000 fiscal year, detailing how he intends to divvy up the rest of a surplus estimated at $4 billion. Earlier this week, officials said the governor plans to give at least $600 million more to public schools. That still leaves him with at least $2.5 billion to spend.

Some of that is expected to go to state workers in the form of pay raises; other money probably will be banked in the state emergency reserve. Many lawmakers are advocating a tax cut and more aid for local government.

Davis’ decision to use general fund money for construction projects follows recommendations by the legislative analyst’s office and others that California rely less on bonds and other long-term debt.

Throughout the 1980s and 1990s, California financed most of its construction with bonds. The state cost to repay the principal and interest on that debt will climb to $2.7 billion next year.

“I absolutely think it makes sense, to the extent we can, to pay for streets, highways and repairing potholes on a pay as you go basis rather than with bonds,” said Senate Republican Leader Ross Johnson of Irvine. “You get a lot more bang for the buck.”

Davis wants to spend $335 million of the surplus to build a 4,500-inmate maximum security prison in Delano, and $20 million to plan construction of a new prison in San Diego County. By paying for the construction costs up front, the state will save $200 million or more in interest costs over the next 20 years.

State corrections officials and the legislative analyst’s office estimate that the state will need as many as six new facilities by 2004 to accommodate the growing prison population. A Davis aide, speaking on condition of anonymity, said the governor may propose using bonds to finance the construction of other prisons.

Also in the proposed public works package:

* Davis is calling for a $425-million infusion into the so-called Infrastructure Bank. The bank, started by former Gov. Pete Wilson, currently has $50 million. Local governments can tap the bank to finance city and county roads, sewer systems and other projects.

* The governor wants to buy $6 million worth of new ferries for San Francisco Bay and spend $69 million for new rail cars. The additional cars would allow two more daily trips on the San Diegan between Los Angeles and San Diego, and more rail trips on lines between Bakersfield and Sacramento, Stockton and San Jose, and San Jose and Sacramento.

* Davis proposes $157 million to expand state parks and rebuild their trails, restrooms and other facilities. The legislative analyst recently estimated that the state’s 265 parks have $180 million worth of maintenance and building needs.

The governor’s aide did not specify which parks would get the money. However, the administration provided a list of some projects: a new fire protection system at Will Rogers State Park; two new restrooms at Malibu Creek State Park; stabilization of Malibu Pier; trail work at Topanga State Park; and repairs at the Antelope Valley Indian Museum.