SACRAMENTO — Road, levee, school and housing construction projects throughout California are on the verge of being halted or delayed, as state officials prepare to shut off their financing in the most drastic fallout yet from California's cash crisis.
Officials plan to meet today to freeze financing on these projects and about 2,000 others, including park improvements, environmental restoration and repairs to state prisons.
Among the efforts that could be idled or postponed are a carpool lane on the 405 Freeway between the 10 and 101 freeways and $373 million in repairs and overcrowding relief for Southern California schools, including emergency repairs at nine Los Angeles Unified School District high schools and five Compton schools, according to lists compiled Tuesday by state agencies.
The financing moratorium also could imperil the construction or relocation of California Department of Forestry and Fire Protection stations throughout forested areas; a new veterans home serving western and northern Los Angeles and Ventura counties; a career center and technical education complex for a school for the deaf in Riverside; an appeals courthouse in Santa Ana, and a Cal State University library in Monterey Bay.
Many of the projects were authorized by voters in 2006 and championed by Gov. Arnold Schwarzenegger in his reelection campaign that year.
All rely on funds that are nearly depleted because the state has been unable to sell the routine bonds it uses to keep cash flowing. Last month, the state failed to sell two-thirds of bonds worth $500 million, according to state Treasurer Bill Lockyer.
Lockyer told legislators last week that halting public-works projects would have a ripple effect through California's economy, costing private companies $12.5 billion and eliminating 200,000 jobs.
The cost of shutting down a project in midstream is enormous, said Jim Earp, executive director of the California Alliance for Jobs, a construction industry-backed nonprofit group that advocates for public-works spending.
"It gives the contractor cause to file suit for damages," he said. "It is incredibly disruptive. It can cause major safety problems. We are going to be putting thousands of people out of work."
Stopping public-works spending also would move California away from what many economists and President-elect Barack Obama are recommending to address the country's deepening recession. They have been arguing that such projects are among the best ways to jump-start the economy.
