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The Keston Institute for Public Finance and Infrastructure Policy at the University of Southern California hosted its fourth forum in the series, “Assessing Performance and Progress of California’s 2006 Infrastructure Bonds,” in the wake of the California State Legislature’s historic passage this morning of a comprehensive water package that would aggressively address the Golden State’s highly-politicized, complex water issues.
“The news from Sacramento this morning about the state legislature’s agreement on a comprehensive water package is a solid attempt to address the linked issues of water infrastructure and ecosystems enhancement,” said Richard Little, director of the Keston Institute, in addressing the forum. “As the funding of these improvements will be decided upon by voters in November, its vitally important that the public is provided with free and open forums and assessments of bond measures like the Keston Institute offered today,” continued Little.
The group reviewed the status of projects three years after California voters overwhelmingly approved over $42 billion in general obligation bonds to fund transportation, flood protection, school construction, housing, and water supply protection.
The group of panelists joining Little included John Decker, executive director of the California Debt and Investment Advisory Commission; Bimla Rhinehart, executive director of the California Transportation Commission; Lynn Jacobs, director of the California Department of Housing and Community Development; Ron Gastelum, former general manager of the Metropolitan Water District of Southern California; and Carole D’Elia, deputy executive director of the Little Hoover Commission. Nicole Bullock, capital markets reporter for Financial Times, moderated the forum.
The majority of the panelists provided updates on how much of the allocated bond money has made it into existing projects, as well as perspective on how the state’s budget crises and credit market difficulties in the past year have impacted the progression of projects approved under the 2006 measure.
“The future of transportation in the state appears to be all gloom and doom,” said Rhinehart. “Projects are only funded on a cash flow basis and dependent upon bond revenue. All other ‘pots’ of funding are at risk, creating a delicate balancing act under a cloud off uncertainties, all of which make it difficult to proceed,” continued Rinehart.
Many of panelists echoed Rhinehart’s frustrations, suggesting that “California voters want it all but just don’t want to pay for it all.” A result of this, they advised, is that state agencies and organizations need to find long-term, sustainable sources of funding “without continuing to use the state bond system as a credit card.”
The results of the budget stalemate from last year will create some breathing room to address long-term issues, suggested Decker. Elaborating on his prediction, Decker said that “there will be big opportunities to bridge difficult divides and make better decisions over long term” due to an election year, as the legislature and governor will be “well incentivized to get constructive things done and correct problems.”
About The Keston Institute
The Keston Institute for Public Finance and Infrastructure Policy at the University of Southern California is a non-partisan research center that actively addresses California and the nation’s public finance and infrastructure challenges. It is specifically focused on regional and national transportation and water issues and promoting economic viability, livability and environmental sustainability.
Together with the Keston Institute, the USC School of Policy, Planning and Development has created the only educational and policy degree track in the field of civil infrastructure, with the goal of making USC a world leader in infrastructure and policy development.
The Institute’s ongoing research is exclusively focused on analyzing core infrastructure challenges facing California and the nation, while presenting realistic, objective recommendations to voters and policymakers. For more information about The Keston Institute, please visit http://www.usc.edu/keston.
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