Schwarzenegger Bond Issue Not on June Ballot

Stymied by Republican resistance, Gov. Arnold Schwarzenegger’s hope of placing the most comprehensive rebuilding project in California history on the June ballot foundered Wednesday amid recriminations among legislative leaders and the administration.

The California Assembly approved only a $4.1-billion borrowing plan to shore up the state’s levees and $19 billion more for school construction. But late Wednesday night, the Senate declined to act on either measure, and the upper house’s leaders said further negotiations would have to focus on the November ballot.

Passing the hastily negotiated package “starts looking to Californians like we don’t know what we are doing,” said Senate leader Don Perata (D-Oakland).

He said he hoped that lawmakers could place on the November ballot “something we can be proud of.”

Even the measure that the Assembly approved was a far cry from the ambitious $49-billion plan the governor and Democratic leaders had been trying to pass in time to place on the June ballot.

Schwarzenegger and Democratic legislators had hoped to salvage the far more ambitious effort, which they intended to relieve clogged roads, build more affordable housing, expand overcrowded schools, improve mass transit and refurbish parks throughout the state. But Republican legislators balked at the more comprehensive package. The governor could not sway his own party members despite weeks of intense negotiations.

GOP legislators, almost all of whom are more conservative than the governor, objected to the idea that the state should go deep into debt to pay for the ambitious building project.

Schwarzenegger proposed a sweeping infrastructure improvement plan in January that involved $68 billion in borrowing. The centerpiece of that proposal was the most popular, according to public opinion polls: a $12-billion investment in upgrading California’s highways.

On Wednesday, the governor and legislative leaders pared away everything except money for levees and schools.

The plan considered Wednesday “is a Slim-Fast bond proposal. It focuses on our priorities,” said Steve Maviglio, spokesman for Assembly Speaker Fabian Nunez (D-Los Angeles).

After a late afternoon meeting, legislative leaders summoned their members to the Capitol to vote.

Legislators have plenty of time to place whatever they want on the November ballot, but negotiators had been working intensely in recent weeks toward a complete package for June, concerned that political pressures would make passing such measures later or individually far harder.

“I think we have to reevaluate whether a mega-bond concept is the right way to go,” Nunez said.

Democrats may become less willing to give Schwarzenegger a political victory for his reelection campaign.

Schwarzenegger earlier dismissed the idea of passing parts of his plan piecemeal, saying that such an approach would be myopic and in the past had allowed the state’s physical foundations to fall into serious disrepair.

“In recent decades, California has invested piecemeal, crisis by crisis, traffic jam by traffic jam,” he said in his January State of the State speech. “There is a better way, a smarter way, a more fiscally responsible way to invest in our future.”

He envisioned a series of bond issues that would go before voters over the next decade to finance improvements to much of the state’s infrastructure.

The transportation piece alone included 750 new miles of highway lanes, 550 miles of new High Occupancy Vehicle lanes, the repair of 9,000 miles of lanes as well as new commuter rail lines, bike and pedestrian paths and other improvements.

It also incorporated improvements to the state’s courthouses and jails, which Democrats quickly rejected.

Schwarzenegger embraced the idea of a massive public works project last year after voters rejected his November special election agenda, which called for loosening teacher tenure, restricting state spending and diluting the political power of unions -- all measures that appealed to Republicans but infuriated Democrats.

“The people, who always have the last word, sent a clear message: cut the warfare, cool the rhetoric, find common ground and fix the problems together,” Schwarzenegger said in his January speech.

“So to my fellow Californians, I say: message received,” he continued. “And I hope the members of the Legislature also got the message that people want us to work together.”

But it was his own party that proved the biggest obstacle to the rebuilding plan. GOP resistance grew as the governor signed off on Democratic demands to include money for affordable housing and urban parks and to increase the amount dedicated for mass transit.

A Field poll taken in February found that all those areas won public support of at least 63%, but GOP legislators did not consider the Democratic additions to be valuable uses of taxpayer funds.

Because a two-thirds vote of the Legislature is required to place a proposition on the ballot, the Republican minorities in the Assembly and Senate have effective veto power.

They insisted on far less spending and resisted Democratic efforts to strip out of the governor’s plan the provisions Republicans liked, including changes in environmental rules to make building easier and money for the construction of water storage projects that are important to agricultural interests.

Nunez said in response to a question about what would happen to the other issues: “We would put them off for the November ballot.”

Schwarzenegger’s initial $222-billion plan would have required California to borrow $68 billion, saddling the state with more than $3.7 billion in debt annually through 2025.

Over recent days, the governor and his staff implored Republicans and their leaders to support the package, but in the end they could not find two Republicans in the Senate and six in the Assembly needed to guarantee approval.

A primary sticking point was GOP demands for money to build two new reservoirs and repair Perris Dam -- which is seismically unsafe -- in Riverside County.

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Times staff writers Robert Salladay, Peter Nicholas and Evan Halper contributed to this report.