California Governor Arnold Schwarzenegger (L) presents actor Sylvester Stallone (R) with a city proclamation on the set of ‘Rocky VI’ in Pico Rivera, California December 23, 2005.

Reuters has Calif. gov. against infrastructure tax hike

California Gov. Arnold Schwarzenegger’s plan for a potentially massive infrastructure bond will not include tax increases to finance the debt he will propose, a spokesman said on Friday.

Additionally, it is unlikely the Republican governor who has taken a hard anti-tax line in prior state budgets will propose raising taxes in his next budget plan next month, said H.D. Palmer, a spokesman for the state finance department

“I wouldn’t bet the rent money on seeing a tax increase,” Palmer told Reuters.

Schwarzenegger and aides are putting the finishing touches on an infrastructure bond plan and details likely would not be disclosed before the governor’s state-of-the-state speech on January 5, Palmer said.

The governor has suggested $50 billion as a possible amount for a bond package. It would include a mix of financing options but not tax increases as some have urged, according to Palmer.

“Where we have a difference with them is with the need for a tax increase,” Palmer said.

California Alliance for Jobs, which represents heavy construction firms and their union employees, proposed on Wednesday that a bond plan raise the state’s sales tax by a quarter-cent to finance $20 billion in debt to upgrade and expand the state’s infrastructure.

California could spend more than $100 billion in improving its transportation network alone, according to the group.

The state’s levees, ports and public buildings also are in desperate need of upgrades, according to Schwarzenegger and top lawmakers, who earlier this year agreed infrastructure would be a top priority for the 2006 legislative session.

“We feel that a quarter-cent sales tax as part of a mechanism to finance these improvements based on our research would be supported by the voters if it’s a sound plan,” said Jim Earp, executive director of California Alliance for Jobs.

California infrastructure has been neglected in the past decades and taxes raised to make incremental changes have been diverted by the Democrat controlled legislature to pay for education, pension and social service spending.

California needs new freeways, light rail and other transportation improvements. The waterways including levees need to be upgraded to better withstand earthquakes and future population increases.

If the Governor can complete the existing infrastructure projects already approved and infuse new bond money for new projects without a general tax increase he will make many friends with California voters.

Stay tuned……

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