Governor’s Building Plan Raises Concerns

A power struggle is emerging over Gov. Arnold Schwarzenegger’s $222-billion public works package. Democratic leaders say legislators and local governments would be required to cede too much influence in deciding how to remake California’s roads, jails and waterways.

The issue is expected to be one of the main points of contention as lawmakers today begin considering Schwarzenegger’s proposal for the biggest building effort in four decades.

Schwarzenegger has said he wants to ensure that the effort -- which would be paid for through $68 billion in state borrowing as well as federal aid, user fees and existing gas taxes -- does not become politicized by lawmakers insisting that all districts have projects funded no matter the need.

“We’re all clear ... that we should build what is necessary for the state of California, not having each legislator say, ‘Well, I need this street to be built in my neighborhood, and I need this little bridge there, and I need this and I need that,’ ” Schwarzenegger said earlier this month.

Democratic leaders, who suggested months before Schwarzenegger that a large investment needed to be made in the state’s physical foundations, agreed that lawmakers should not select every project.

But under the governor’s plan, enormous multibillion-dollar ventures -- such as deciding how to move goods more quickly through California’s ports and setting fees on water users -- would be determined by state agencies -- without being included in the annual budget approved by the Legislature.

Democrats complain that they could be bypassed on politically sensitive policy decisions. Those include whether to build new dams and who should pay for them; how best to funnel water through the state; and what portion of public safety money should be spent on prison cells versus rehabilitation programs.

In addition, Democrats say Schwarzenegger’s plan contains disturbing echoes of previous grand proposals from the governor that also would have sidelined lawmakers. Concerns about turning Sacramento into an autocracy helped doom his California Performance Review, which aimed to streamline state government, as well as Proposition 76, last year’s failed initiative to limit state spending.

After his special election defeats, Schwarzenegger pledged to work with legislators instead of trying to go around them.

“It just seems to be a long step backward, creating not only new bureaucracies but unprecedented central government support,” said Senate President Pro Tem Don Perata (D-Oakland). “I don’t think it flies.”

Perata said he was inclined to move forward instead with public works proposals that legislators have already submitted.

Both the Legislature and state voters must approve the general plan before borrowing can occur; lawmakers hope to place the first phase of the plan on the June ballot.

“We have existing proposals, my own included, that have been vetted over the course of the year and serve the same purposes as the governor’s proposal but do so in a much more facile and fair manner and are much more likely to get the consensus necessary to get on the ballot,” Perata said.

Assembly Speaker Fabian Nunez (D-Los Angeles) said lawmakers should be the ones to decide the state’s priorities, especially when they involve major efforts such as unclogging California’s congested ports.

“I’m not sold on the idea that we approve a general plan and then a government agency is going to determine priorities,” Nunez said. “I think priorities have to be determined here.... When people go to vote for this, they ought to know what they are voting for.”

Much of Schwarzenegger’s public works spending plan, including $47.5 billion for schools, would be distributed through existing methods that lawmakers agree with.

But under the governor’s plan, state agencies would play an enlarged role in proposing the specific projects to receive $26 billion in bond money intended to build or improve roads, bridges, ports and bike paths.

The nine members of the California Transportation Commission, a quasi-independent agency, would make the final decisions after considering any alternatives that regional officials suggest.

Legislative officials said that process would minimize the role of local nonprofits and governments to nominate projects, as they do now.

But the administration says most projects would have to have been included in a regional transportation plan before they could be endorsed, so locals would have a say.

Lawmakers also are bristling at Schwarzenegger’s proposal to leave out of the budget $2 billion in grants that will be given to local governments to relieve overcrowded jails. The administration says many of those decisions would be based on very pragmatic concerns, such as which jails have rooms that can be converted into treatment centers, for example.

The governor’s $10-billion water bond proposal is an area of particular concern. Senate officials say that state water agencies would be given the authority to decide such politically sensitive issues as whether to build a canal to route water around the Sacramento-San Joaquin River Delta to agricultural and urban areas in Central and Southern California. California voters rejected such a project, known as the Peripheral Canal, in 1982.

“People who are not elected from the Department of Resources make all these decisions and allocate all these billions of dollars,” said state Sen. Sheila Kuehl (D-Santa Monica), chairwoman of the Senate Natural Resources and Water Committee.

“If there’s no real approval process involving the Legislature, then you have no oversight,” Kuehl said. “We’re constantly being surprised by [other] projects being funded in the wrong way, or too much, or things being funded and that never start.”

H.D. Palmer, spokesman for the state Department of Finance, said the administration is not considering any contentious projects such as a Peripheral Canal. But he said that keeping projects out of the state budget “is kind of an insurance program against pork barreling.”

“It wasn’t that long ago that the ability to get enough votes to pass the state budget depended on which members of the Legislature were able to get special projects funded in their district,” Palmer said. “Since these bond funds would be appropriated in an ongoing or continuous manner, you essentially eliminate the potential for critical improvements in infrastructure throughout California being held hostage by a small handful of projects.”

But it is not only Democrats who have concerns about the amount of leeway given to state agencies in parts of the plan. Senate Republican leader Dick Ackerman of Irvine said he was concerned that the transportation projects would not be selected through the State Transportation Improvement Program, which uses set formulas to distribute money to different areas of the state.

“I think it’s a fairer process,” Ackerman said.

Schwarzenegger and lawmakers also have substantial disagreements on the focus of the entire package.

Majority Democrats are pressing to include affordable housing and seismic safety improvements to hospitals in the bond package. Republicans -- whose support is necessary to place the borrowing package on the ballot -- are insisting on easing the environmental rules governing the construction.

People in both parties have raised concerns about the level of debt the state would undertake. Republicans have called for less reliance on borrowing, and Democrat Nunez said Monday that he believed the Legislature had the will to approve only about half the debt Schwarzenegger has proposed.

“We’re more fiscally conservative,” Nunez said with a grin.