Angelides: Rates Are Low, Borrow Big!

If anybody were paying the slightest attention to state Treasurer Phil Angelides, he’d be raising hackles. Fellow Democrats would be fleeing from him and Republicans attacking.

He’d be radioactive for Dems and a lightning rod for Reps. The professional pols, that is. Who knows what the voters might think? They might agree with what he’s espousing. He clearly believes so.

Angelides contends the state government should go on a borrowing binge. Sell $25 billion in construction bonds next year. That’s equivalent to one-fourth of the current state budget--and $10 billion more borrowing than Gov. Gray Davis deems tolerable.

Why not, the treasurer asks. Interest rates are at a 32-year low. California’s infrastructure--roads, schools, water facilities--is badly in need of repair and upgrading. We’ve got another 12 million people arriving in the next two decades. And if this recession doesn’t bottom out soon, the state building boom could provide an economic stimulus.

And, yes, all that borrowing might require a tax increase. The taboo “T” word. Making Angelides controversial--if anyone knew.

“There are no magic dollars that can be produced out of nowhere,” he says. “It’s time for an honest dialogue in this state about what we need.”

Angelides has been expounding his views in speeches that relatively few people attend, and in interviews that rarely receive prominent play in the news media. He’s just part of the background clatter at the Capitol, along with all the other statewide elected officials who, except for the governor, have a hard time getting heard.

Angelides, 48, is heavily favored for reelection next year. His sights are set on running for governor in 2006. That puts him on a collision course with two other Democratic state officials: Atty. Gen. Bill Lockyer and Lt. Gov. Cruz Bustamante.

A wealthy former Sacramento housing developer and state party chairman, Angelides elicits mixed reactions from political insiders. Many see him as overly ambitious and opportunistic, not exactly shocking traits for a politician. But he’s also widely seen as bright, energetic and articulate. And he gets right to the point.

In the next 20 years, California will add 4 million households, 2 million schoolkids and 5 million jobs, he says. “This growth will exceed that seen during the boom years of the 1950s, ‘60s and ‘70s combined.”

The California Business Roundtable has estimated the state will need to spend at least $100 billion on repairs and construction in the next decade. That’s a conservative figure. Some experts say transportation improvements alone could cost $100 billion.

Says Roundtable President Bill Hauck: “The problem can be stated in one word: growth. We are not facing up to the fact that California is growing at half a million people a year.”

The problem also can be stated in another word: leadership.

The last big California builders were Govs. Pat Brown and Earl Warren. We--and the politicians--have been living off their bold, visionary projects for about four decades.

Not that some progress hasn’t been made, slowly.

Gov. George Deukmejian built prisons and helped raise gasoline taxes to pay for more road construction. Gov. Pete Wilson opened an infrastructure bank for local governments and helped pass a record $9.2-billion school bond. Gov. Davis pumped $5.3 billion into traffic congestion relief and helped lower the vote requirement for local school bonds.

But, complains Angelides, infrastructure planning “has not been a central part of our policymaking for decades.”

For starters, he’d allow local governments to float bonds and raise taxes with a majority vote, instead of requiring two-thirds.

He thinks the state can afford $25 billion in new debt over the next five years, and he’d stick all those bonds on next November’s ballot. “We might as well get on with the business of doing it.”

Politically, isn’t that too much? “It depends on how big a case leaders of the state are willing to make to voters,” he replies. “If posed in the right way, voters will respond. I don’t think you can be timid about it. . . .

“The country’s in distress. Isn’t this a good time to talk about what our longtime needs are?”

Californians should consider themselves investors, he says. Investors in easier commutes, unclogged schools and retaining some semblance of California’s vaunted lifestyle.

“Smart investors,” he says, “move when prices are down and interest rates are low. . . . Just seems to me the state ought to have the presence to take advantage of low borrowing rates.”

It’s all background clatter, but still more interesting than a lot of the claptrap being voiced these days by some gubernatorial candidates.