There will be no infrastructure bonds on the June ballot. This is a certainty. But what does that mean?
There are a host of articles linked on the main page today where you can read the ‘spin’ out there from over a dozen different political reporters (or in some cases "teams" of political reporters). I will take a few minutes here and put in my ten cents.
Let me first talk about the Governor. Arnold Schwarzenegger has certainly won the debate — there is no question from any corner about the need for California to invest in significant infrastructure needs for the state. The Governor laid out a bold plan last January, and has spent months making a case for this. It’s not too hard a case to make when you spend hours on clogged highways, or see the state of disrepair of many of California’s levees.
So why, with the need so great, and a ‘superstar’ Republican Governor making a very passionate and persuasive case to the people of California about a need for strategic infrastructure growth, did the legislature fail to place anything on the June ballot? After all, recent polls showed that the voters would likely approve a borrowing plan.
The answer is crystal clear. The Governor ran into the political gauntlet of the partisan legislative Democrats. They salivated with the idea of their own little ‘win-win’ scenario, relishing the opportunity….
It goes like this — the Governor introduces a rather large concept — a massive infrastructure investment with a tremendous amount of borrowing as a central component (he proposed almost $60 billion in borrowing). But the Governor, his proposal, tied that borrowing to significant fiscal spending reforms, redirecting transportation money (which had been diverted by Democrats) back to transportation projects, a borrowing cap, and more. Central to the Governor’s proposal was that the money borrowed would go to those things that everyone looks at as "mortar and brick" infrastructure needs — roads, highways, levees, etc.
The Democrats, probably chuckling while they did it, proceeded to hijack the proposal, and started loading it up with billions and billions of dollars in pork spending and other non-infrastructure items — suddenly ‘infrastructure’ was to mean soccer fields, affordable housing, mass transit and more. Soon this package was akin to the S.S. Titanic, a package so bloated with irresponsible spending that it was clearly no longer in the best interests of California for it to pass.
Of course, this was the point for Perata and Nunez, the Democrat leaders. This is their ‘win-win’ because they would either get all of this wasteful spending figuring that the Governor would leverage his own party to get something, anything on the ballot. Or — the Governor would face the loss in political capitol of not getting anything on the June ballot.
Well, the Governor is not the sucker that Perata and Nunez would take him for. Over the last few weeks, the Governor has diligently lead meetings of the "Big 5" negotiators, trying hard to get a spending proposal approved by the legislature that would both meet California’s infrastructure needs, and be fiscally responsible.
Of course, the Governor had reinforcements — Assembly Republican Leader Kevin McCarthy, since the Governor’s State of the State Address, has lead a unified GOP caucus in ensuring that Perata and Nunez could not engineer a big liberal spending extravaganza "disguised" as infrastructure investment heading to the ballot. McCarthy, along with his lead negotiator, Assemblyman Rick Keene, lead a hard-nosed negotiations, looking for the fiscal reforms proposed by the Governor, as well as some element of actually paying-as-you-go going forward (with the idea that we are in this predicament of lacking necessary infrastructure due to a failure to pay-as-we-went in the past).
In the meantime, Senate Republicans under the leadership of leader Dick Ackerman took a different approach, trying to engage in substantive policy negotiations with the idea that if something does pass, let’s try to make it as fiscally sound as we can. This strategy, while leading to a lot of good things being in the bill being discussed, ultimately failed because the Democrat majority in the Senate, lead by Perata, would not be detracted from their goal: either get their pork-laden bill out, or jam the Governor by denying him an infrastructure package for the June ballot.
So the real ending to this chapter is that the Republicans in Sacramento – the Governor and Senate and Assembly Republicans – worked hard, in good faith, to bring a fiscally responsible infrastructure plan to the voters in June, but it wasn’t possible to do it with a Democrat-controlled legislature caught somewhere between their hunger to engage in social engineering (by loading up the plan with billions in non-infrastructure spending) and their desire to replace Republican Schwarzenegger with either Phil Angelides and Steve Westly.
In the end, last night, you ended with the Senate and Assembly Democrats (at least their leaders) in a tiff with either other, and a rather last-minute example of dysfunction as the Senate MIRACULOUSLY passed (unanimously) a billion dollars of general fund (i.e…pay as you go) money for levee repairs, that included a provision for the Governor to bypass costly CEQA and other regulations, only to see the matter not even taken up by the Assembly (they still can, and should pass this measure). In the other house, the Assembly passed two bond measures (both with considerable bi-partisan support) to place borrowing proposals for levee repair and school facilities repairs on the ballot. The Senate adjourned without taking up these proposals.
So where do we go from here? Well, I’m sure that negotiations will continue (in good faith from the GOP side) with perhaps better results absent the deadline for a June ballot date. But those negotiations may end up in a similar disappointing way if the goal of the Democrats in the legislature is to load up any spending plan with billions of non-infrastructure spending.
The Governor can hold his head up high, knowing that he did the best that he can do. But this all makes a case to the voters of California that we need more common sense in the Capitol. We need legislative majorities that believe in fiscal sanity, that infrastructure should mean infrastructure, and that it makes sense to try to pay-as-you-go on much of California’s infrastructure needs. As we have said on this page many times before, Californians already spend plenty of money for a well-run efficient state government AND enough investment of general fund money into infrastructure to resolve any and all needs.
I think that we should all thank Senate and Assembly Republicans for holding the line — and praise Governor Schwarzenegger for balancing the need for an infrastructure plan with the co-equal need of producing a plan that is about infrastructure, not pork.
Perhaps the solution is simply to qualify a measure for the November ballot that contains only real infrastructure investment, and all of the fiscally responsible components advanced by the Governor and legislative Republicans.
Have a great day.
Jon
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