BOND WATCHDOG—Emily Rusch is working with state lawmakers to ensure that any bond measure put before voters makes fair, responsible and efficient use of taxpayer dollars.

Keeping An Eye On California’s Public Works Bonds

The top priority of Gov. Schwarzenegger and the California Legislature this spring is a new spending plan for the state’s roads, water supply, jails and schools. By the time this newsletter arrives on your doorstep, the Legislature will likely have voted on the details of the first bond to go before voters. The governor’s proposal calls for borrowing up to $68 billion in state bonds, an amount unprecedented in its size and scope.

Because of their size and significance, we’ve been carefully evaluating the bond proposals.

If California carries out the governor’s plan, the state’s taxpayers will, in effect, be responsible for paying back more than $2,300 per person over the 30-year life of the bonds.

The choices California makes about new highways and water supply projects also will have profound implications for how our state grows over the next few decades. We want to make sure our leaders make smart choices that serve the public, not just the powerful special interests that stand to benefit from increased spending.

As the debate over these proposals advances, we recommend the governor and Legislature conform to the principles outlined below to prevent unnecessary tax subsidies, improve transportation, and protect public safety.

Cut Corporate Subsidies
No public official wants to get caught pushing through schemes to spend taxpayer dollars on projects that benefit only a few well-connected special interests. That’s why it’s critical that the governor and lawmakers disclose as much detail as possible on the projects targeted for funding and establish clear guidelines on how public monies should be spent.

We are also calling on the Legislature to follow a “beneficiary pays” principle to fund projects, particularly when a limited number of corporations or taxpayers will benefit.

	BIG GIVEAWAYS TO SPECIAL INTERESTS—The governor’s bond proposal includes $2 billion for port improvements, costs that should be covered by the industries that use them instead of by taxpayers..

For example, the governor’s proposal originally included more than $2 billion in new bonds for investments in our state’s ports along the coastline. However, the benefits of those port upgrades would mostly go to the companies that use them to import and export goods, including a large number of out-of-state and foreign companies.

CALPIRG recommends that port upgrades be entirely paid for by cargo fees or another type of user tax that requires the corporations that benefit from the ports, not citizen taxpayers, to fund improvements.

Californians Need Transportation Options
The governor’s proposal would have California spend $107 billion on transportation, with the majority of funds going to new roads, road improvements and commercial goods movement around the ports, and only a small percentage of funds targeted for alternative transportation options.

Unfortunately, new roads too often just lead to more development and don’t solve congestion problems in the long run. New roads also require even more public dollars for future maintenance.

To make sure that California is spending wisely on new transportation, CALPIRG advocates the following:

• The governor and Legislature should incorporate significant mass transit options into any bond for transportation. Californians should have more transit options available to them, and often mass transit turns out to be cheaper when all of the social costs and benefits are included.

• California should invest in maintaining our current roads. The cost of repairing roads often becomes exponentially higher as roads degrade; therefore taxpayers benefit from the timely upkeep of roads in use.

• Before California builds new roads, the state must identify the new funds to maintain them in the future, preferably through a user-based fee such as a small increase in the gas tax. Yet the governor has proposed hundreds of new highway lanes that the state will have to maintain, without an increase in ongoing resources to maintain them.

• To protect taxpayer dollars, the state should set up specific guidelines to make sure that public/private contracts share both the risks and the benefits of any project.

• If there are projects that benefit only commercial interests, such as port upgrades and special lanes for trucks, then those beneficiaries should pay for the projects.

• Partnering with private companies to build infrastructure has the potential to speed construction and lower the cost. However, too many public/private contracts place all of the financial risk on the state and give most of the profits to private interests.

Flood Prevention Requires New Policies
The governor’s bond proposal also sets aside significant funding to make improvements to existing levees, especially in the region around Sacramento that is most at risk.

CALPIRG agrees that public safety should be a top priority for the state. However, if repairs are done without enacting complementary policies, maintaining existing levees is only a band-aid solution to protect public safety.

The Legislature should take advantage of heightened public awareness about the risks of flooding to enact policies that protect people from floods and avoid billions more in taxpayer dollars in the future. For example, a major break in the levees around Sacramento could cost the area between $7 and $16 billion dollars.

Floods occur when water doesn’t have a place to settle, and as more and more of the state’s floodplains are paved over, the risk of floods will only increase. The state’s top priority should be flood prevention—managing floodplains so that floods are less likely to occur in the first place.

Unfortunately, current floodplain maps are either out-of-date, inadequate or do not exist for areas at risk. Residents deserve clear information about the risks of flooding in their areas. One of the first steps to protecting the public is to require flood mapping of areas behind levees and areas where flooding is reasonably foreseeable.

The state must then update our flood control system with a plan to build set-back levees, allow for wider river corridors, and permanently set aside some floodplains to allow rivers to break out when needed.

In addition, the Legislature should limit state funds for projects in local areas that allow development with significant flood risks, enact a floodplain development fee on builders, and/or require local land use plans to include flood control management.

Finally, the Legislature should implement stronger regulations for flood insurance so that residents at risk are better informed, and better covered, in the case of a flood. Enacting these policies will prove that the Legislature is truly concerned with protecting human health and safety, and not just property.

CALPIRG’s Next Steps
CALPIRG is working with transportation and water experts to make sure the Legislature passes a bond that truly is worth the money spent.

Although the governor’s original proposals need work, we know that investing in our state’s infrastructure could lead to faster, cleaner transportation options to get to work each day, flood prevention that saves lives, and water supply upgrades that increase water efficiency and conservation. We’ll continue working on your behalf to make that vision a reality.