I trust that had a great Thanksgiving Holiday!
This will be a busy week at the FlashReport, so I hope that you will check back to this site each and every day!
Today’s featured column was written exclusively for the FlashReport by Jon Coupal, President of 
the Howard Jarvis Taxpayers Association. Entitled, Massive Bond Threatens State’s Future, Coupal walks us through the reasons why now is exactly the wrong time for the state to be looking at further leveraging its precarious financial position with a mega-bond (I’ve heard numbers ranging from 50-100 BILLION dollars) deal.
From what I have heard so far, one idea being bounced around is to borrow this huge some of money, and use current moneys that are spent on construction and infrastructure to pay off the principle of that loan. Then we would pay the interest of that loan with general fund dollars.
The whole thing is ludicrous. I was on the speakers bureau for Proposition 76, the Governor’s "Live Within Our Means" proposal. I know that our main speaking point in support of instituting significant structural reforms (including a modest spending cap and mid-year budget cut authority for the Governor) was that there is a structural spending problem in Sacramento. "Your family cannot spend more money that it takes in," I told those who would listen. "Vote for Proposition 76 because we have a spending problem in Sacramento."
Well, a massive infrastructure bond now would be like a family that has no money, that is living paycheck to paycheck, and not making ends meet (with maxed-out credit cards) taking a massive additional mortgage out on their already mortgaged house.
Note that in this example, the family already cannot pay their bills, let alone the new obligation of the principle and interest on the massive mortgage… Also note that it is likely that no bank would likely even loan the family big pool of money…
I have a great deal of respect for Jon Coupal, and his concerns are reason enough for me to be wary of a new "Era of Pat Brown" when our finances are so messed up.
But it is not just Coupal that has concerns — these concerns have been echoed everywhere I turn. As someone who supports this Governor, I am hoping that the talk about this infrastructure bond was a ‘trial balloon’ of sorts, to see whether Democrats would offer up real structural reform in
return for this kind of spending.
The Governor has a healthy base in this state. You can pretty much figure that everyone who voted for the measures he advocated would vote for him. His challenge in winning reelection is to retain this base, and build from there. Embracing a massive bond measure blows that strategy out of the water, as conservatives will balk at this kind of spending odyssey. See more of my thoughts on a go-forward strategy for the Governor here.
Coming tomorrow…and exclusive column focusing on the Governor’s pending big decision — appointing a replacement to Justice Janice Rogers-Brown on the California Supreme Court.
Jon
P.S. If you did not read my request for feedback on the FlashReport website as we near two full month of publication, please click here.
P.P.S. Thoughts, tips, observations, write to me (anonymously if you choose) right here.
