California Infrastructure Introduction History Infrastructure Needs Initial Proposals - Senate Proposal - Schwarzenegger Proposal - Assembly Proposal Infrastructure Package on Nov. Ballot Key Web Sites Public Opinion Reports and Studies Newspaper Articles   May 2006

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History

From 1950 to 1970, California invested heavily in public infrastructure in response to its quickly rising population. The state experienced an economic boom in the 1950s, a result of industry growth over the first half of the century. Federal spending increases brought in new revenues and there was growing bi-partisan support for infrastructure investment. Republican Earl Warren was governor from 1943 to 1953 and began to lay the groundwork for expansion during his three terms. In 1958, Pat Brown won the gubernatorial election and the Democratic party won both houses of the state legislature. Brown and the legislature focused on building widespread transportation systems, access to inexpensive higher education with new state university campuses and increased access to water resources across the state.

This commitment to infrastructure funding came to a stop in the 1970's. Decreases in capital investment took place during the late 1960's signaled by Gov. Ronald Reagan's skepticism towards public sending. Then, during his term, Gov. Jerry Brown slowed infrastructure finance under the belief that growth should not go on without limit. Inadequate funds for transportation growth along with Brown's support of environmental reviews and regulations led to fewer new highways. Environmental concerns also stopped the building of new water storage facilities. Proposition 13's passage in 1978 led to a sharp diminishment of infrastructure projects owing to the proposition's requirement of a majority for the passage of any new bonds or taxes. Many believe that Prop. 13's success is an indication of 1970's California voters dissatisfaction with government expansion.

The years since the 1970s have seen significant barriers in all three core areas of infrastructure building. Water infrastructure has become an immensely complicated issue with the rise in population. Projects face competition and government approval as well as the strict guidelines of the Endangered Species Act and other environmental laws. Highway expansion received very little funding in the late 70s and 80s due to inflation, environmental restraints and resistance to fuel taxes. California's higher education system received significant cuts during the past three decades despite rising levels of enrollment. Low revenues at the local level have meant limited infrastructure development in counties and cities as well.

Infrastructure funding increased somewhat during the 1990s as California's economy took off and demand began to increase. However, existing infrastructure proved unable to accommodate the millions of new people in the state. Highways became congested, education enrollment skyrocketed and water supply issues multiplied. Lawmakers have focused on local assistance rather than investing in new infrastructure. This ongoing lack of support for infrastructure development has resulted in increasing calls for expansion and maintenance in the years since Prop.13. Governors, legislators and other government officials as well as independent scholars and journalists have conducted studies of the infrastructure problem and have published their findings. The consensus is that California's infrastructure is in serious need of repair and expansion. There are too few water facilities with a lack of capacity. Flood control is a major issue with the state $5 billion short of what is needed to repair Delta levees. California's highways are in disrepair and are the most congested in the country. Experts estimate that current funds are $150 billion to $200 billion short of the state's transportation needs. California's education system has grown into the largest in the country, yet is under-funded and under-achieving. It is in this context that major proposals for infrastructure repair have been presented in 2005 and early 2006.

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Background Reading

A Primer: The State's Infrastructure and the Use of Bonds. Sacramento: Legislative Analyst's Office, January 2006.

Hanak, Ellen; Baldassare, Mark.
"California 2025 : taking on the future," Western City, Vol. 81, no. 6, June 2005.
Western City

Dowall, David E.; Whittington, Jan.
Making Room For the Future: Rebuilding California's Infrastructure. San Francisco, CA: Public Policy Institute of California, 2003. 225 p.
Vieg, Karsten J;

"Special Issue on California's Infrastructure", Public Affairs Report, Institute of Governmental Studies, Winter, 2001.
Public Affairs Report

David E. Dowall
California's Infrastructure Policy for the 21st Century: Issues and Opportunities. San Francisco, CA : Public Policy Institute, 2000.


California's public investment gap : financing infrastructure : issues and implications. Sacramento, CA : California Budget Project, 1999. 12 p.

Trinkl, Frank H.
Rusty hinges on the Golden Gate : an analysis of California's infrastructure and proposals for new financing. Sacramento, CA: Assembly Office of Research, 1984. 302 p.

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Infrastructure Needs

Funding for California's major infrastructure has traditionally covered a wide range of programs in different areas of state construction and upkeep. The table below features the different areas considered part of California's infrastructure. The table also includes $55 billion in infrastructure needs detailed in the 2003 edition. of California's Five Year Infrastructure Plan. Sec. 13100 of the California government code requires that each year the governor submit a five-year plan which details infrastructure development in different programs. The 2003 edition was introduced by Gov. Gray Davis and was the last submitted. Gov. Schwarzenegger has more recently estimated $500 billion in infrastructure needs over the next 20 years.

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Initial Proposals: Sept. 2005-March 2006

These proposals were all major infrastructure plans introduced from Sept. 2005 through March 2006 with the aim of making either the June or November election ballots. These proposals involve bond financing. For a description and explanation of bond financing, see "Making Dollars Make Sense" from the California Budget Office. Legislators and Gov. Schwarzenegger met and attempted to find agreement on a new infrastructure bond package which maintained the interests held in these proposals. The Senate failed to pass any compromises arising from these negotiations (see June Ballot Deadline section below) and as a result, no infrastructure plans will be placed on the June ballot. Negotiations are now focusing on infrastructure proposals for the November 7 general election.

Senate Proposal
Senate President Pro Tem Don Perata introduced his bond package as a way to pay for the eastern span of the Bay Bridge. It initially cost $7.6 billion. Legislators and the governor came to a separate bridge agreement and Perata rewrote and amended Senate Bill 1024 as a broader $10.2 billion proposal in September 2005. The bill would have authorized $10,275,000 billion in state general obligation bonds for specified infrastructure improvements. The bill's pricetag continued to grow over the winter and spring. Some estimated the bill's final cost at over $13 billion. SB1024 would not have required a tax increase. Perata has said that he considers SB1024 only a "down payment" and he plans other infrastructure bills in the future. SB 1024 is now being pushed for the Nov. 7, 2006 ballot.

SB1024 core provisions:
* $2.5 billion for repair and expansion of state's ports and trade corridors.
* $1.2 billion for levee repair and other flood protection .
* $2.3 billion for highway repair and expansion and other transportation projects.
* $1 billion for a high-speed rail system that would link Northern and Southern California.

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Schwarzenegger Proposal
Gov. Schwarzenegger's proposal, which he presented during his 2006 State of the State speech, is the broadest of the infrastructure proposals and would ultimately involve the biggest amount of money over the longest period of time. His Strategic Growth Plan would put a proposition before voters to approve $25.2 billion worth of general obligation bonds for initial infrastructure development. Then, his plan calls for issuing $68 billion in bonds during the next 10 years. Combining the bonds with other funding sources, the government would tackle a wide set of infrastructure problems with the goal of accommodating 45 million Californians by 2020. The overall amount would be $222 billion. Missing from the governor's proposal is any note of the controversial high-speed rail system which is included in both Perata's and the California Alliance for Jobs plans. Schwarzenegger has promised not to raise taxes to accomplish his plan. However, the proposal also calls for new fees on the population, including water fees on every California household.

The state Assembly heavily debated Schwarzenegger's plan through March. Several Democratic lawmakers said that they wanted to to shorten the size and scope of the governor's proposal. Schwarzenneger's 10 year plan would stretch over five election cycles and some Assembly Democrats wanted to see that shortened to only one or two elections. Assembly Republicans also differ with the governor and introduced their own infrastructure plan, ACA 27 (see section above). They seek a way to improve California's infrastructure without borrowing as much money. The Schwarzenegger administration is now aiming a version of their plan for the Nov. 7, 2006 ballot.

Schwarzenegger Plan core provisions (over the 10 year period):
* $107 billion for transportation and air-quality programs. 1,300 miles of new highway lanes, including new car pool lanes. 600 miles of additional commuter rail and thousands of miles of bike and pedestrian paths.
* $48.2 billion for expansion and maintenance of school facilities. Includes several billion for charter schools.
* $35 billion for levee repair and other flood protection. Introduction and updating of water conservation, recycling, desalination, watershed management and similar programs. Creation of new storage facilities.
* 17.4 billion for criminal justice facilities. A majority of the funds would go towards the creation of new jails and prisons. $600 million would be used for other projects such as fire protection.
* $3.3 billion for new court houses and other facilities. Plan includes $400 million to retrofit state buildings incase of earthquake and expand health and safety programs at state parks.

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Assembly Proposal
California Assembly members introduced ACA 27, on Jan. 25, 2006. This plan would start in 2007-08 and would save 1% of the state's general fund revenue for infrastructure projects such as highway and water facilities improvements. Each succeeding year, the amount set aside would climb by one-half percent of the state's general fund or $750 million, whichever amount is smaller. ACA 27 also requires that no new funds may be set aside for infrastructure projects unless the Proposition 98 guarantee for schools is fully funded. ACA 27 supporters are aiming their proposal for the Nov. 7, 2006 ballot.

ACA 27 Core Provisions:
* The program would cost approximately $36 billion.
* Would allocate a portion of state money for 10 years for infrastructure.
* Money would be spent on areas of need including water storage, flood control, University of California facilities improvements and highway
projects.

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Infrastructure Package on November Ballot

The Senate and Assembly worked with the governor over February and March to come up with a joint infrastructure proposal by the March 16 deadline to insure it would appear on the June ballot. A proposal was introduced by the Democrats on March 10th which was presented as a compromise between Gov. Schwarzenegger and Republicans and Democrats in the Senate. This proposal included $39.7 billion in bonds to pay for transportation upgrades, repairs to levees, mass transit projects, and educational facilities improvements. An additional $9.1 billion in bonds would be placed on the Nov. 2008 ballot for school and university construction and remodeling. The Senate rejected the $48.8 billion bond package by a 24-12 vote, just short of the two-thirds majority needed to send it to the Assembly. Democrats claimed that the proposal was a significant compromise and addressed the priorities of both parties. However, Republicans said it included too much money for environmental protections and did not put aside enough money for repairs of levees and construction of new highways. Despite these setbacks, Gov. Schwarzenegger declared that he was determined to work with the legislature to put a initiative on the June ballot. However, he also said that he wanted the proposal to be the best possible and was willing to wait until November election if necessary.

On March 15, Schwarzenegger and Assembly submitted a compromised deal which split the earlier $48.8 proposal by asking voters to approve a $24 billion bond measure. The measure would have provided money for new classrooms and for repair of the state's flood control system. However, the Senate did not vote on it by midnight of the 15th, eliminating any infrastructure possibility for the June ballot.

With an infrastructure proposal off the June ballot, Schwarzenegger and law makers in Sacramento concentrated on putting a proposal on the November 7, 2006 general election ballot instead. After months of negotiations, lawmakers approved a bond package on May 5, 2006. Gov. Schwarzenegger promised to quickly sign the package to qualify for the November ballot. The package includes four separate bond measures to fund the infrastructure program: $19.9 billion for transportation, $10.4 billion for school improvements, $4.1 billion for flood control and $2.9 billion for new housing. The bond package also includes a separate measure, a constitutional amendment which would prohibit the California sales tax on gasoline from being used for anything other than transportation programs.

Key Web Sites

California Alliance for Jobs

California Business Roundtable
Page on California Infrastructure.

California Infrastructure Coalition

Don Perata Senate Web-Site

Strategic Growth Plan
Website for Gov. Schwarzenegger's infrastructure plan.

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Public Opinion

Baldassare, Mark.
PPIC Statewide Survey: Californians and Their Government, Public Policy Institute, March 2006.

Schwarzenegger job ratings improve a bit. Voters like most, but not all, of his infrastructure bonds proposals. Field Poll, Release 2181, Mar. 1, 2005.

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Reports and Studies

Semler, Michael.
Financing California's Infrastructure. Sacramento: CSU Faculty Research Program, December 2005.

Paving the Way: Massive Public Works Project Moves Forward. Budget Watch, California Budget Project, Mar. 2006.
See page 4 for article.

Making Dollars Make Sense. Sacramento: California Budget Project, February 2006.

A Primer: The State's Infrastructure and the Use of Bonds. Sacramento: Legislative Analyst's Office, January 2006.

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Selected Newspaper Articles

The following citations are in reverse chronological order and include links to full-text online when available. For more information on full-text access, see Tips for Finding Full-Text Articles.

Chorneau, Tom.
"$37 billion bond plan gets OK for fall ballot: Long list of projects will be funded if approved by voters," San Francisco Chronicle, May 6, 2006.
San Francisco Chronicle

Chorneau, Tom.
"Upbeat poll numbers for governor: Voters don't blame Schwarzenegger for failed bond plan," San Francisco Chronicle, Mar. 30, 2006.
San Francisco Chronicle

Chorneau, Tom.
"Bond measure fails to make the ballot: Assembly approves package, but Senate doesn't take vote," San Francisco Chronicle, Mar. 16, 2006.
San Francisco Chronicle

Lucas, Greg; Chorneau, Tom.
"Public works bond might not make it onto June ballot: Lawmakers keep negotiations going as deadline passes," San Francisco Chronicle, Mar. 15, 2006.
San Francisco Chronicle

Thompson, Don.
"Governor, lawmakers seek to revive public works bond deal," San Francisco Chronicle, Mar. 13, 2006.
San Francisco Chronicle

Chorneau, Tom.
"Standoff eases on governor's bond package: Talks reopen to put public works plan on June ballot," San Francisco Chronicle, Mar. 12, 2006.
San Francisco Chronicle

Walters, Dan [Opinion].
"Infrastructure tests whether political crisis is endemic," Sacramento Bee, Mar. 12, 2006.
Access World News (UCB)

Furillo, Andy.
"Hope dims for getting a bond accord - Rejecting Democrats' plan, GOP urges more water storage, fewer restrictions on transportation work," Sacramento Bee, Mar. 12, 2006.
Access World News (UCB)

Furillo, Andy.
"Business boosts infrastructure: The U.S. Chamber of Commerce has entered the fray on the proposal to rebuild the state's roads, levees and schools, paying for a TV ad praising Gov. Schwarzenegger's economic record," Sacramento Bee, March 9, 2006.
Access World News (UCB)

Lucas, Greg.
"Dems polish $30 billion infrastructure bond for June ballot: GOP says measure lacks necessary policy changes," San Francisco Chronicle, Mar. 8, 2006.
San Francisco Chronicle

Geissinger, Steve.
"Infrastructure bond gets late push," Oakland Tribune, Mar. 8, 2006
Access World News (UCB)

Furillo, Andy.
"Democrats put heat on governor - Nunez, Perata say Schwarzenegger must get his party on board with bond deal," Sacramento Bee, Mar. 7, 2006
Access World News (UCB)

Geissinger, Steve; Sheppard, Harrison.
"Governor, lawmakers under the gun on bond talks," Oakland Tribune, March 7, 2006.
Access World News (UCB)

[Opinion]
"Waiting isn't so bad, governor," San Francisco Chronicle, Mar. 7, 2006.
San Francisco Chronicle

Walters, Dan [Opinion].
"Report shows need for infrastructure," Oakland Tribune, March 4, 2006
Access World News (UCB)

Chorneau, Tom.
"Voters like governor's $68 billion bond plan/Job performance rating still down, latest survey shows," San Francisco Chronicle, Mar. 1, 2006.
San Francisco Chronicle

Adamick, Mike.
"Poll finds majority support school, transportation taxes," Contra Costa Times, February 27, 2006
Access World News (UCB)

[Opinion].
"Foolish financing: Private housing is not appropriate for bond project," Daily News of Los Angeles, February 27, 2006.
Access World News (UCB)

Furillo, Andy.
"Bond plan attacked from two sides: Environmentalists say water and air goals suffer, State treasurer says it doesn't promote conservation," Press-Enterprise, February 24, 2006.
Acces World News (UCB)

Sanders, Jim.
"Governor's bond plan is too large, Nunez warns: Assembly speaker says Democrats fear education funds would suffer under the $68 billion plan. He says his party also wants to add projects," Sacramento Bee, Feb. 15, 2006.
Access World News (UCB)

Weintraub,Daniel.
"Perata on public works: I am in the driver's seat," Sacramento Bee, February 14, 2006.
Access World News (UCB)

Walters, Dan [Opinion].
"Infrastructure visions will be put to political test this week," Sacramento Bee, February 14, 2006.
Access World News (UCB)

Geissinger, Steve.
"Renewal bond bid in trouble," San Mateo County Times, Feb. 13, 2006.
Access World News (UCB)

Furillo, Andy.
"Suddenly, infrastructure is hot: Governor's overhaul plan is getting good poll numbers as rivals offer their own versions," Sacramento Bee, Feb. 12, 2006.
Access World News (UCB)

Garcia, Edwin.
"Democrats say schools before roads, bridges: Assembly members say state should spend more per pupil in education, while promising to work, cooperate with governor," Contra Costa Times, Feb. 10, 2006.
Access World News (UCB)

[Opinion].
"Building less debt with infrastructure," Business-Press California, Feb. 6, 2006.
Access World News (UCB)

Gledhill, Lynda.
"Dems seek adjustments to governor's bond plan: Need for investment in infrastructure not an issue, cost is," San Francisco Chronicle, Feb. 5, 2006.
San Francisco Chronicle

Maclachlan, Malcolm.
"Despite huge price tag, governor's bond plan leaves out Democratic priorities," Capitol Weekly, Jan 12, 2005.
Capitol Weekly

Mendel, Ed.
"Governor's infrastructure path follows blazed trail: State's previous efforts failed to gain support," San Diego Union-Tribune, Jan. 12, 2006.
Access World News (UCB)

Goldmacher, Shane .
"Governor's Bond Plan Would Monopolize State's Debt for More than a Decade," Capitol Weekly, Jan 12, 2005.
Capitol Weekly

Martin, Glen.
"Panel urges immediate repair of delta levees: Report says major quake could cause catastrophic damage," San Francisco Chronicle, Jan. 11, 2006.
San Francisco Chronicle

Gledhill, Lynda.
"Angelides calls governor's idea 'lot of hype': State treasurer pans infrastructure plan, challenges numbers," San Francisco Chronicle, Jan. 10, 2006.
San Francisco Chronicle

Dahlberg, Carrie Peyton; Weiser, Matt.
"A 'huge' boost for flood safety," Sacramento Bee, Jan. 6, 2006. .
Access World News (UCB)

Martin, Mark.
"Bold agenda for state: $222 billion, 10-year proposal: Governor's ambitious program to fix crumbling infrastructure," San Francisco Chronicle, Jan. 6, 2006.
San Francisco Chronicle

Howard, John.
"Senate settling on infrastructure bond package," Capitol Weekly, Dec. 22, 2005.
Capitol Weekly

Delsohn, Gary.
"Group: Let tax pay for bond : A coalition proposes a quarter-cent hike in sales levy for infrastructure," Sacramento Bee, December 22, 2005.
Access World News (UCB)

Gledhill, Lynda.
"Governor's Democratic rivals back his bond idea," San Francisco Chronicle, December 21, 2005.
San Francisco Chronicle

Delsohn, Gary.
"Angelides urges caution on bonds: Let those who benefit from public works pay part of cost, he says," Sacramento Bee, December 21, 2005.
Access World News (UCB)

Mecoy, Laura.
" Infrastructure bond pitch begins: Senators start in L.A. with campaign to fund public works," Sacramento Bee, December 14, 2005.
Access World News (UCB)

Cabanatuan, Michael.
"Lawmakers push $10 billion bond for infrastructure: But that's only a fraction of what region needs just for transportation, official says," San Francisco Chronicle, December 8, 2005.
San Francisco Chronicle

Holstege, Sean .
"State Dems propose series of megabonds," San Mateo County Times, December 8, 2005.
Access World News (UCB)

Gledhill, Lynda.
"Governor touts upgrades to state: Proposals for roads, ports, levees have high price, promise friction," San Francisco Chronicle, Nov. 28, 2005.
San Francisco Chronicle

Yamamura, Kevin.
"Perata calls for bond for state infrastructure: Lawmakers weigh in on 4the need to upgrade California's roads, ports and levees. Most agree something needs to be done but disagree on the funding amounts and the scope of specific projects," Sacramento Bee, Nov.25, 2005.
Access World News (UCB)

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Prepared by the staff of the IGS Library. Send comments to igsl@berkeley.edu.