Arnold Schwarzenegger,  California,  Election 2006,  Politics

Arnold Schwarzenegger Watch: Infrastructure Bond Trial Balloon – $25-27 Billion

December 29, 2005 /

Reuters and the Los Angeles Times have Schwarzenegger bond plan at $25 bln-$27 bln-report

California Gov. Arnold Schwarzenegger plans to ask for an infrastructure bond issue of $25 billion to $27 billion, the Los Angeles Times reported on Thursday, quoting administration sources.

The celebrity Republican has already signaled he is seeking massive spending on infrastructure in the nation’s most populous state. But he has not given a final amount after his administration hinted at a number as high as $50 billion.

Schwarzenegger will unveil his plans on January 5 in his State of the State address, which will be followed on January 10 with the presentation of his new fiscal year budget.

Details of the governor’s proposals are typically leaked in the days leading up to those presentations. The Los Angeles Times did not provide more details about the infrastructure bond sum, although it said it was expected Schwarzenegger would face an uphill battle winning two-thirds of legislators to back the plan.

A spokesman for the California Department of Finance did not return several calls seeking comment.

The California economy is good and the structural deficit that has plagued Schwarzenegger’s past state budget appears to have disappeared.

California infrastructure, especially transportation, is a mess and requires investment dollars to continue economic growth.

But…… how will Governor Schwarzenegger pay for the bonds?

A bond issue in the $25 billion-$27 billion range would far outstrip a $10.3 billion infrastructure bond proposal from State Senate President Pro Tempore Don Perata, a Democrat.

State Treasurer Phil Angelides, a Schwarzenegger critic and Democratic candidate for governor, has stepped up warnings about the danger of issuing new debt.

In a recent report, he said California has $34.6 billion in general obligation bonds outstanding and $30.4 billion in authorized but unissued bonds.

The devil will be in the details……

Stay tuned.

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