Is governor Schwarzenegger promoting a form of child abuse?

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Arnold Schwarzenegger abusing a kid

For the past decade I have fallen into using non layman political correct terminology that shifts the focus away from out of control expenditures. Specifically the term “bonded indebtedness” when applied to redevelopment projects where people ignore the future bond payments. Most recently I have written about the proposed  bullet train from San Francisco and Sacramento to San Diego and have failed to properly spell out the huge potential debt burden.

While we read  “a report from the state’s budget analyst” that our ” budget deficit will balloon to $20.7 billion over the next 18 months, “voters in our state must have been mesmerized by the proposed 200 mph bullet train in voting to approve spending almost $10 billion in the first phase of the HSRA project last year. This is identified as Prop 1A. This proposed bullet train project could approach $100 billion in cost by the time it is eventually completed if matching funds are found.

What voters fail to recognize is that these Bonds, which typically extend for 30 to 40 years, will be added to those which precede them and must be paid out of the annual tax proceeds received in Sacramento. In essence what we are doing is going wild with a CA credit card whose payments will be born by our children and grandchildren.

 We are recklessly leaving them with the challenge of figuring out how to pay off this future debt which will remain on our books long after Arnold and the current members of our state legislature are termed out of office.

A nice gift to leave our heirs. I would label this  “bonded indebtedness” as a form of “child abuse.”

And to make matters worse is that our governor just made a calculated risk by ignoring current transportation needs and was “all in” in hopes to get the maximum requested for this single project as described below. Governor Schwarzenegger. Addressing our transportation infrastructure is not a high stakes poker game where you can risk it all for one “special interest” project.

“Gov. Arnold Schwarzenegger quietly spiked an effort last month to win $1.1 billion in federal high-speed rail stimulus funds for 29 projects to improve the safety, speed and capacity of heavily traveled commuter corridors through Southern California.

Instead, he ordered state officials to seek money for only one project — the proposed bullet train between San Francisco and San Diego.

The governor’s decision was intended to increase the state’s chances of receiving high-speed rail money, officials said. California is competing with more than 40 applicants from 23 other states.”

Let’s take a minute to look at “The State’s Current Debt Situation”

Amount of General Fund Debt.  As of June 1, 2008, the state had about $53 billion of infrastructure-related General Fund bond debt outstanding on which it is making principal and interest payments. This consists of about $45 billion of general obligation bonds and $8 billion of lease-revenue bonds. In addition, the state has not yet sold about $68 billion of authorized general obligation and lease-revenue infrastructure bonds. Most of these bonds have been committed to projects, but the projects involved have not yet been started or those in progress have not yet reached their major construction phase. General Fund Debt Payments. We estimate that General Fund debt payments for infrastructure-related general obligation and lease-revenue bonds were about $4.4 billion in 2007-08. As previously authorized but currently unsold bonds are marketed, outstanding bond debt costs will rise, peaking at approximately $9.2 billion in 2017-18.”

If we were to add the HSRA Bonds to this total  we may be forced to set aside $10 billion dollars from our General Fund each year for upwards of 40 years that could have been spent for future necessary services including education and public safety.

About Larry Gilbert