California budget crisis spurs freeze on funds for schools, roads
Top state financial officials vote to halt $3.8 billion in spending for projects including emergency repairs at L.A. and Compton schools.
Reporting from Sacramento — The state's top three financial officials voted unanimously today to freeze $3.8 billion in financing on road, levee, school and housing construction projects throughout California in the most drastic fallout yet from the state's cash crisis.
Among the efforts that will 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 by state agencies.
The financing moratorium also imperils 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; and a Cal State University library in Monterey Bay.
The delay in one project, an appeals courthouse in Santa Ana now under construction, could leave the judges homeless when the lease of their current court runs out in the spring, a court official told the board. The court had planned to be in its new building by then.
More than 2,000 other projects include park improvements, environmental restoration and repairs to state prisons. Many of them were authorized by voters in 2006 and championed by Gov. Arnold Schwarzenegger in his reelection campaign that year.
All of them rely on funds that are nearly depleted because the state has been unable to sell the routine bonds it uses to keep cash flowing. The state's finance experts said the credit markets will not buy these short-term bonds until the Legislature has agreed on a plan to completely erase the state's budget gap, which is expected to reach $41.8 billion by July 2010.
"Today's action was extremely regrettable but the responsible and right thing to do," state Treasurer Bill Lockyer said after the vote by the obscure Pooled Money Investment Board, which he runs with state Controller John Chiang and Schwarzenegger's finance director, Mike Genest.
"We had no other option to keep crucial public services operating as long as possible," Lockyer said. "But it's now official -- the failure to solve our budget problem has put in grave danger billions of dollars in revenue for our businesses and thousands of jobs on which our workers and families depend."
