[BATN] Skeptical legislators target $222b Schwarzenegger plan Date: 06 Jan 2006 22:12:47 -0800 X-Fingerprint: sentto-2486642-28183-1136689463-news=energy-net.org@returns.groups.yahoo.com-127.127 Published Friday, January 6, 2006, in the San Jose Business Times Skeptics target $222B Schwarzenegger spending plan By Timothy Roberts The governor's $222 billion proposal to improve and expand California's roads, rails and schools has been met with skepticism by legislators. Governor Arnold Schwarzenegger Thursday night proposed spending $222 billion over the next 10 years on the state's infrastructure. He also called for raising the minimum wage by $1. His proposal, outlined in his State of the State address calls for a series of general obligation bond issues over the next eight years totaling $68 billion. The money would be used to leverage private sector investment and federal funding to build 750 new highway lane miles, 600 miles of new commuter rail lines and 9,700 new school classrooms. "Think of California as a mutual fund -- in particular, a growth fund," the governor said. "Why do we invest in a growth fund? Because we believe in the economic future. So I ask each of you ... do you believe in California's economic future? Well then we must invest in it. If we do not invest in ourselves, how can we expect others to invest in us?" But Assembly Budget Chairman John Laird, D-Santa Cruz, says it isn't financially responsible to sell $68 billion in bonds to be paid for out of the state's general fund. Doing so would crowd out many other necessary expenditures, he says. "We have funding expiring from previous bonds for libraries, housing, water quality and park land," Laird said Friday. Schwarzenegger "didn't really propose anything for those in his bond proposal." Although the BART extension from Fremont to San Jose and Santa Clara is not specifically mentioned in a preliminary list of transportation projects, it would certainly be covered by the final legislation, says Carl Guardino, the president and CEO of the Silicon Valley Leadership Group, who led the campaign for voter approval of the project in 2000. "State revenue is growing, the economy is growing, and we have leadership that knows the importance of transit," Guardino said. The Republican governor acknowledged his failure at the polls last November, when his ballot initiatives on state budgeting, redistricting, teacher tenure and political fundraising by unions all went down in defeat. "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. "So to my fellow Californians, I say -- message received." The unusually humble governor then went on to call for a 20-year strategic plan for the state's infrastructure. According to a report from the Legislative Analyst's Office, the governor failed to file a required five-year infrastructure plan last year, but Thursday night, Schwarzenegger took on the next two decades with billions of dollars in spending. At the same time he called for a debt ceiling that will prevent the state from going too deeply into debt. Jim Wunderman, President and CEO of the Bay Area Council, called the governor's proposal "nothing less than the Marshall Plan for California." California Chamber of Commerce President Allan Zaremberg credited the governor with leading the state's economy back from the brink and said his bond plan "is essential to keeping California's economy booming." But State Controller Steve Westly, who is running for the Democratic nomination for governor this year, said the governor's plan was just an election ploy. "Make no mistake -- this isn't about a long-term plan for the state," Westly said in a statement. "This is the governor's try for a short-term fix for his political image." State Treasurer Phil Angelides, who is also running for the Democratic nomination for governor, also expressed skepticism about the governor's proposal. "His actions have never matched his rhetoric," Angelides said in a statement. "Tonight we got more proof of that. Governor Schwarzenegger proposed a cap on state borrowing -- after loading billions of dollars of debt on our children. It's like King Kong saying 'let's make it illegal to climb tall buildings.'" Art Pulaski, executive secretary-treasurer of the California Labor Federation, applauded the governor's call for rebuilding roads, ports, hospitals and schools, but said, "We must diversify and expand our tax base to avoid saddling our children and grandchildren with insurmountable debt." He also called for indexing the minimum wage so that it would increase automatically with any increase in the cost of living. The governor's proposal is expected to come to the Legislature in the form of separate bills. Laird says the first task for the legislature will be to determine how to handle the flow of legislation. Democrats already have a $10.7 billion infrastructure plan that may become their starting point on negotiations. On Tuesday, the governor will release a much shorter-term spending proposal -- his proposed budget for next year. Email article texts/URLs for posting to . Manage your subscription by sending a blank email message to: BATN-subscribe@yahoogroups.com to subscribe, BATN-unsubscribe@yahoogroups.com to unsubscribe, BATN-digest@yahoogroups.com to switch email to digest mode, BATN-normal@yahoogroups.com to switch email to normal mode, BATN-nomail@yahoogroups.com to switch email delivery off. See http://groups.yahoo.com/group/BATN for web access & archives.