California has had so many budget problems over the past few years that many of us have become desensitized to the magnitude of the problem our state faces. Hopefully, this will remind us of the scale of problem we’re looking at:
In as few as nine days, nearly $5 billion worth of public works projects in California, including schools, roads and bridges, could be halted or indefinitely delayed - leading to the loss of thousands of jobs - unless lawmakers fix the state's massive budget mess, state Treasurer Bill Lockyer said Monday.
With so much hope for a national infrastructure stimulus, it’s even more shocking to see the Golden State in danger of moving the other way. We need a large investment in our infrastructure more desperately than ever and yet the politics of passing a budget through Sacramento threatens to hold up much needed projects and kick the Californian economy while it’s down.
Lockyer was among the state's highest-ranking finance officials to speak Monday before the Legislature's unprecedented joint session, warning lawmakers to quickly address the state's projected $11.2 billion revenue shortfall for the current fiscal year.
If no solution is enacted soon, the state could run out of cash by mid-March.
Among the public works projects that are in jeopardy in the Bay Area are the current carpool lane construction on Highway 101 in Sonoma County and the planned fourth bore in the Caldecott Tunnel. The ongoing Bay Bridge construction is not affected, officials said.
But many other public works projects are immediately threatened because in recent weeks it has been nearly impossible to sell bonds, primarily for two reasons: The credit market remains frozen and investors are weary of buying bonds from a state that hasn't addressed its budget deficit, Lockyer said.
This is the birds coming home to roost: credit is tight, so who wants to loan to a state with such a bad budget history? Of course, the situation is not simple. Our state’s budget problems stem from the national economic crisis, stalemate partisanship in Sacramento, the balanced budget amendment, the energy crisis of yester-year (Enron, remember them?), and any number of other factors. But one part is simple: putting billions of dollars of state works projects in deep freeze right now would be tremendously bad for the state economy.
"Without a budget solution, state financing of infrastructure projects will stop. It's as simple, and dire, as that," he said. "Highway projects, school construction and other vital work in communities across California will be delayed or not even break ground."
He said that if that happens, thousands of construction workers could lose their jobs, tens of thousands of new jobs will not be created and businesses could lose billions in contracts with the state.
Three other state officials - Controller John Chiang, Department of Finance Director Mike Genest and nonpartisan Legislative Analyst Mac Taylor - echoed a similar doom-and-gloom prognosis for the state.
Genest said the state's projected deficit will likely be larger when Gov. Arnold Schwarzenegger announces his budget proposal in January.
"Failure to act now - we'll be creating a financial disaster," Genest said.
It is imparitive that our state officials eliminate this budget and maintain their investments in California's infrastructure. If you're a Califorian, I urge you to contact your state representative immediately and tell them to move forward with a plan to eliminate the deficit and keep these critical projects moving forward.
Find your State Representatives: http://www.legislature.ca.gov/...
Contact the Governor: http://gov.ca.gov/...