Revival of Public Works Plan Is Urged

In a move that could boost Gov. Arnold Schwarzenegger’s reelection effort, legislative leaders are trying to revive a plan to borrow billions to improve California’s roads, schools, levees and housing.

The roughly $35-billion public works package that lawmakers are negotiating -- without the governor’s participation -- would require voters’ approval in the Nov. 7 general election, when the races for governor and most of the Legislature will be decided.

Although details are still in flux, the new proposal is more modest than the $68 billion in borrowing that Schwarzenegger announced in January as his top priority. It is also far smaller than a $49-billion package that fell apart in March amid disagreement over how much new debt California should assume and other perennially polarizing topics. Those include use of state money to build dams and municipal parks.

The sticking points are not much different now; they concern the overall amount of borrowing and the way the money would be spent.

Schwarzenegger and the Democrats who form the legislative majority agree that the state needs to invest billions in California’s critical physical foundations or risk economic and natural hazards.

Roads are so congested that trucks have difficulty delivering goods brought in through the state’s ports. The levees along the rivers that provide much of Southern California’s water are dilapidated and in danger of rupturing in a New Orleans-style disaster that could flood thousands of homes.

An infrastructure deal also has important political ramifications in this election year. Schwarzenegger’s last two ambitious efforts -- to refashion the state bureaucracy and to reform the Capitol’s political culture -- came to naught. And Democratic leaders are eager to demonstrate that the Legislature is not as dysfunctional as Schwarzenegger has portrayed it.

People familiar with the negotiations said lawmakers want to place four bond proposals on the ballot. Voters would be asked to borrow roughly $19.2 billion for new roads and public transportation, $10.4 billion for school construction and renovation, $3.1 billion for shoring up levees and $2.6 billion for affordable housing.

“I’m optimistic, but I’m always cautious,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “I’ve been here long enough to know that over a comma or a sentence, a deal could fall apart.”

George Plescia (R-San Diego), the new Assembly Republican leader, said: “We’re still talking, we haven’t thrown any punches. We’re getting down to it.”

Nunez and his Senate counterpart, President Pro Tem Don Perata (D-Oakland), said they hoped to vote on the proposal as early as today. Placing the bonds on the ballot requires agreement by the governor and two-thirds of the Legislature, so at least a handful of Republicans must go along with it.

The package would leave out some of the contentious subjects that helped doom the last attempt at a deal. It does not include money for water storage -- a GOP priority -- and little or none for parks, which Los Angeles Mayor Antonio Villaraigosa and urban Democrats had campaigned for.

Lawmakers are also leaving out any money to renovate courts and jails, as they did in March.

Also missing would be the most ambitious component of Schwarzenegger’s initial proposal: enough money to cover all of California’s infrastructure needs for 20 years. He wanted nearly four times as much borrowing for education, and three times as much for flood control and water supply.

The governor warned in his State of the State speech that for too long “California has invested piecemeal, crisis by crisis, traffic jam by traffic jam.”

The legislative leaders are trying to find common ground on allowing road and levee improvements to sidestep the state’s environmental protection regulations. Democrats say those are essential; Republicans say they slow down work and drive up costs.

The lawmakers also are attempting to reach agreement on allowing private firms to design and build some of the new projects instead of vesting all the responsibility in the California Department of Transportation.

In the earlier round of negotiations, Schwarzenegger led the effort to get a deal on the June 6 primary ballot. But his fellow Republicans balked at assuming the amount of debt Schwarzenegger favored. And Democrats did not want the expense of the bonds to consume so much of the annual state budget, potentially cutting into money for teachers’ salaries and healthcare programs.

Lawmakers from both parties complained that the governor’s office confounded things by representing the deal differently to different groups of lawmakers. A last-ditch effort to put something on the June ballot fell apart due to Democratic infighting.

Now the four legislative leaders -- representing the Democratic and Republican caucuses in the Senate and Assembly -- are negotiating on their own.

It’s “just us young ‘uns,” Perata said after leaving a negotiating session Wednesday morning with the other three leaders. “The governor has been kept informed.”

At a morning news conference, Schwarzenegger was upbeat, portraying his own role as more central than legislators have described it.

“We are still in the middle of negotiating, but it looks really good, the whole thing,” Schwarzenegger said. “We are analyzing the language now, so there is no misunderstanding of what each side understood.”

Adam Mendelsohn, the governor’s spokesman, said the deal under discussion includes the areas that have been most important to Schwarzenegger all along: roads, levees and schools. The governor must sign an infrastructure measure before it can go on the ballot.

The housing portion was added by Democratic leaders. Republican legislators are pushing for the money to be aimed at helping first-time home buyers.

The Democratic plan would include more than $300 million toward that goal. Most of the housing money would benefit the elderly, the chronically homeless and renters.

The push to reach a deal this week is driven by two looming deadlines.

Next week, Schwarzenegger is scheduled to present his final draft of the annual state budget, and lawmakers say that document will quickly dominate legislative attention and reduce the likelihood of an infrastructure agreement.

An even more pressing target comes Friday, when proponents of an initiative involving transportation funding are expected to submit signatures to election officials to place their measure on the November ballot.

The measure would prohibit lawmakers from siphoning away money dedicated for roads and transit to balance the state budget, something they did in 2003 and 2004.

That initiative is backed by a coalition of contractors’ groups, unions and local transportation planning authorities.

But legislative leaders want to include in their ballot items a more flexible version that would allow them to borrow transportation money during budget crises with the requirement that it be paid back within a few years.

Mark Watts, executive director of Transportation California, part of the coalition, said the group has collected 1.1 million signatures, twice as many as necessary to qualify for the ballot.