Governor Needs Widespread Support for Blockbuster Plan

Gov. Arnold Schwarzenegger casts himself as a world-class pitchman who has parlayed even his worst movies into box-office wealth, and in proposing the biggest construction blitz in California history he may have taken on the toughest sales job of his life.

To realize the grand vision he outlined in Thursday’s State of the State speech, he’ll need substantial political capital. He’ll also need the unswerving loyalty of Republican lawmakers, without whom the sweeping plan cannot pass the Legislature.

Right now, he has neither.

The governor will need to convince voters that he can be trusted to bring to fruition a program of enormous cost, complexity and scope. But two years after taking office, he has no record of accomplishing anything approaching such a scale.

Schwarzenegger is simply betting the public shares his conviction that California’s network of roads, ports, levees, courthouses and schools is woefully unprepared for the population growth predicted over the next two decades. He must also hope the public won’t mind his program’s $222-billion price tag. Nearly $70 billion of that would be borrowed.

Those billions would buy hundreds of miles of highway and commuter rail lines, new toll lanes and port modernization. The governor wants to build 2,000 new schools and upgrade 141,000 classrooms. He is proposing new county jails and court buildings. And to guard against flooding, he is calling for improvements to state levees.

He sought to drive home his message Friday in Nimbus, outside Sacramento, where he warned, “In many parts of our state a big earthquake or a few big storms one after another could cause major levee failure and huge damage.”

Fears of a Katrina-style disaster might help the governor win pieces of the 10-year building program and declare victory, some analysts said. And Schwarzenegger may be able to count on support from powerful interests: Labor unions typically welcome building projects that create jobs. Cities and counties probably will endorse plans to remedy crumbling roads.

Business interests have long clamored for a solution to traffic congestion that slows the delivery of merchandise. Other potential fans of the projects include commuters tired of sitting in traffic and politicians who want tangible accomplishments to show constituents.

Indeed, said Ed Constantini, a political science professor emeritus at UC Davis, Schwarzenegger deserves praise for thinking long-term -- a practice, he said, that is in short supply.

The governor’s plan, Constantini said, is “a plus in terms of his image and a plus in terms of public policy in California.”

Still, asking voters and two-thirds of the Legislature to embrace the entire package may be an audacious gamble at a time when Schwarzenegger’s public approval rating hovers at 32%.

Jon Fleischman, a Republican activist who runs the FlashReport blog, wrote after the speech: “The problem is one of credibility. As a Republican, and a conservative, I am astounded, confused and demoralized that the governor I elected on a platform of fiscal responsibility and reform wants to now be the ‘build it’ governor.”

Other complications are expected from many quarters:

* Republicans. Schwarzenegger is asking fiscally conservative lawmakers to send to the ballot proposals for borrowing $68 billion. The rest would come from a combination of federal and local money, private sector contributions and user fees.

The timing is poor. Many Republicans remain unhappy with Schwarzenegger over his hiring of a Democratic activist, Susan Kennedy, as his chief of staff. And they want assurances they’ve yet to see that Schwarzenegger has a plan to repay the money. “The insidious thing about debt is you have to pay it back,” said state Sen. Dave Cox (R-Fair Oaks).

* Democrats. While Democrats are traditionally more receptive to public-spending projects, Schwarzenegger is asking for the party’s support as he runs for reelection. If Democrats cooperate, they could be handing the governor a potent campaign tool.

There is little doubt the borrowing plan will become entwined with the reelection campaign. Steve Westly, the state controller and a Democratic candidate for governor, said of Schwarzenegger’s proposal: “We don’t know where the money will come from, where it will go or who will keep an eye on it.”

* Interest groups. Schwarzenegger’s plan would gobble up all available money for public construction. There would be no state bond money available for high-speed rail, public housing or parks for at least a decade. Those who object to Schwarzenegger’s priorities will surely take their case to the Legislature.

* The process. The governor’s aides say he cannot market the bond issue as a take-it-or-leave-it proposal to be settled in a single vote of the people. Under Article 16 of the state Constitution, bonds must be used to pay for a “single object or work.”

The governor will ask lawmakers to put separate bond measures on the ballot for transportation, education, water projects, public safety and the courts -- presenting perhaps 13 bond proposals to voters between now and 2014. Voters could then pick and choose, which could give Schwarzenegger less than what he wants.

A major obstacle in selling the plan could be a perception that Schwarzenegger is betraying his promise to cut up the state’s “credit card.” He told Californians they were doing that in 2004 when they passed Proposition 58, a constitutional amendment intended to limit spending.

But Schwarzenegger says there is no contradiction, that the state has sworn off borrowing to pay for ongoing programs. The latest proposed borrowing would be different, administration officials said, because it will pay for investments that are critical to the state’s future.

Rather than rack up more “credit card” debt, the state would, in effect, be taking out a mortgage, the governor’s aides say. “This is money that is an investment into our future,” said Department of Finance Director Mike Genest. “It will return value to citizens and the economy and transportation systems for many years to come.”

Standing in front of a dam near Sacramento on Friday, the governor suggested that neglecting the state’s construction needs could lead to even greater costs in the future. “The people will be coming and California will be growing, and the needs will get larger and larger if we build or not. It is much better to think 20 years ahead,” he said.

Still, the upfront costs to the state will be enormous. And while some unanticipated revenue this year has left California in fairly good shape to balance the next budget, analysts are already projecting the return of several years of multibillion-dollar deficits.

Borrowing on the scale envisioned by the governor would inflate those deficits by billions of dollars. “Paying back these bonds is going to hit the budget,” said Steve Levy, executive director for the Center for the Continuing Study of the Economy.

Finally, Schwarzenegger has twice set in motion plans of sweeping ambition and had little to show for them in the end.

First he released the California Performance Review, a top-to-bottom overhaul of state government proposed by 275 state employees and outside consultants who worked in secrecy for five months. It answered Schwarzenegger’s call to “blow up” the “boxes” of state government by proposing to save taxpayers $32 billion over five years.

Little of it has been enacted, and the governor did not mention the effort in his speech.

George Passantino, a director of the California Performance Review and a senior fellow at the Reason Foundation in Los Angeles, said that the project “got the big bang, but the follow through just sort of evaporated. It really hasn’t gotten any serious investment of energy.”

Next came the “Year of Reform,” Schwarzenegger’s attempt in 2005 to inject more competition into political races, ratchet down state spending and bar public employee unions from funding politics without the consent of their members. Voters rejected the entire package in the special election two months ago.

Times staff writers Evan Halper, Marc Lifsher and Robert Salladay contributed to this report.

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Governor’s transportation infrastructure proposal

Gov. Arnold Schwarzenegger’s Strategic Growth Plan identified major projects along urban freeway corridors and rail lines for funding. Overall, the plan includes the addition of 550 miles of carpool lanes, 750 miles of highway lanes and 600 miles of commuter rail lines, among other goals. Here’s a look at some of those stretches in Southern California and their projected costs:

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The $107-billion proposal

How the governor proposes to fund his $107-billion, 10-year plan for improving the state’s transportation infrastructure:

(In billions)

New funding sources * $48

Existing funds ** $47

New bonds *** $12

* Increased federal, local and private funding would be attracted by leveraging existing funds and funds from the new bonds.

** Funds from sources such as gas taxes, Proposition 42 and federal funds.

*** Two new general obligation bond issues of $6 billion each would be placed before California voters in 2006 and 2008.

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Some high priorities:

405 Freeway

Cost: $350 million

Complete the $570-million northbound carpool lane addition over the Sepulveda Pass. The project is currently under environmental review.

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710 Freeway

Improve the Long Beach Freeway, main artery for the busy ports of Long Beach and Los Angeles. No funds have been targeted as yet for specific projects along the corridor, which has some of the heaviest truck traffic in the country.

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58 Expressway

Cost: $301 million

Turn a busy two-lane truck route into a four-lane expressway between Kramer Junction and Barstow. Groundbreaking is tentatively set for 2010.

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91 Freeway

Cost: $320 million

Widen the eastbound surface for three miles, among other projects on the clogged, accident-prone artery. The Orange County Transportation Authority has proposed: one or two more lanes each way between the I-15 and State Route 55, four to six more lanes, elevated along the median or parallel to the 91, between the I-15 and SR 241 and an 11.5-mile tunnel to relieve congestion on the 91.

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L.A.-Oceanside Metrolink

Cost: $290 million

Improve tracks shared with Amtrak and freight trains. About $40 million is earmarked for improving tracks at Union Station; the rest would help create under- and overpasses at five L.A. County crossings to separate rail and motor vehicle traffic, and triple-track part of the corridor to speed up commuter service.

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Sources: Caltrans, Metrolink and the Orange County Transportation Authority, ESRI. Graphics reporting by Caitlin Liu and Cheryl Brownstein-Santiago