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Business Groups Push Plan to Sell State Bonds

The State

Finance: Chamber and Roundtable say proceeds would help jump-start California economy.

October 30, 2001|JULIE TAMAKI | TIMES STAFF WRITER

SACRAMENTO — Leading California business groups are pushing a plan for as much as $10 billion in state bonds to build schools, transportation projects and affordable homes.

The California Chamber of Commerce and the California Business Roundtable are the latest special-interest groups rushing to place a measure on the March ballot. The business groups contend money raised from a sale of $5 billion to $10 billion in bonds could help jump-start California's faltering economy by creating jobs and speeding up construction projects.

"Bonds are the fastest way to get money into the California economy," said Fred Main, senior vice president and general counsel of the California Chamber of Commerce.

The rush for ballot measures comes as California faces a projected $8-billion to $14-billion deficit and the possibility of deep spending cuts. Public health and law enforcement interests each are floating proposals to raise the state sales tax by one-fourth of a cent to cover costs associated with terrorism threats.

California cities and counties, meanwhile, are scrambling to put together a measure for the November 2002 ballot that would require the state to repay any money raided from local government coffers.

Jim Keddy, executive director of the PICO California Project, a faith-based group that advocates for the poor, said it remains to be seen whether the flurry of political activity will benefit the public.

"I do think the terrorism attack is bringing people together and creating a greater sense of public community," Keddy said. "The downside is you have people lining up to take advantage of it."

Gov. Gray Davis has said speeding up transportation projects could stimulate the economy by creating jobs. But he has not announced a position on the business groups' bond proposal, which if approved would reduce the amount of general fund money available for other programs because the state would be required to pay principal and interest on the borrowed amount.

Bill Hauck, president of the California Business Roundtable, representing the chief executives of the state's largest corporations, said the Legislature would need to hold a special session to place the measure on the March ballot. Hauck said he would expect the March proposal to be followed by another bond measure in November for schools.

Main said the Chamber of Commerce is exploring whether the measure could be placed on a supplemental March ballot, which he contends would dash the need for a special session if lawmakers act quickly to approve the proposal when they reconvene in January.

Sen. Richard Ackerman, the Irvine Republican who is vice chairman of the Senate Budget Committee, said the proposal could turn out to be an example of the business community's desire to create jobs conflicting with a wish by GOP lawmakers to safeguard taxpayer money.

"A good deal of money has been wasted because the state and the governor have not prioritized spending," Ackerman said.

Paul Hefner, a spokesman for Assembly Speaker Bob Hertzberg (D-Sherman Oaks), was more sanguine. "Speaker Hertzberg believes that because of the economic slowdown the state has faced since Sept. 11, it's more important than ever to move forward with projects that will stimulate the California economy," Hefner said.

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