Report Says California Needs a New Public Works Finance Structure

In the short term the stimulus package may bring economic relief, but in the long term California needs to figure out how it is going to fund the hundreds of billions of dollars of work that are needed to move the state forward.

I found this one on a Capitol Alert from the SacBee. The Public Policy Institute of California published a report that looks at what we are doing now and believes that we will not be able to pay for our what our needs if we do not change course.

California may need a half-trillion dollars to expand and upgrade transportation systems, schools, water delivery and other infrastructure during the next 20 years but the state's system for financing public works is "seriously flawed," the Public Policy Institute of California says in a new report.

With constraints on taxes, including super-majority votes in the Legislature and among local voters, state and local governments rely on general obligation bonds whose repayment must compete with other claims on public treasuries. But, PPIC's report says, GO bonds are a "mixed blessing" and repaying the large amounts of money needed for infrastructure are beyond the capacity of state and local budgets without alternative financing.

"The Obama administration may include funding for state infrastructure projects in an economic stimulus package," Ellen Hanak, PPIC research director and author of the report, said in a statement accompanying its release. "But California needs a long-term solution. There's an opportunity here for the state to rise to the challenge and improve the way we finance the investments in our future."

The full report can be found here.

I think the check is coming for the "free lunch".