This paper focuses on the issues concerning the use of bonds for financing infrastructure projects both by the Governor and the legislature in California. The focus areas are California's infrastructure needs, options available for their payment and the important issues involved in using additional bonds.
California
is one of the industrialized states that has invested billions of dollars in the
development and maintenance of public infrastructure like transportation, water
resources, higher education, health services, criminal justice, natural resources
and general government office space. Besides these, the state also provided funds
for local public infrastructure like K-12 school construction, community college
construction, wastewater treatment, local parks, local streets and roads, flood
control and jails.
Huge
investment is required to maintain and restore the existing infrastructure. It
includes the states highway system, universities constructed in the 1960s and
the state's Central Valley flood control system consisting levees that are a century
old. The
growth of population is about half a million per annum. This results in an increase
in the demand for various infrastructure such as schools, transportation facilities,
water supply and flood control infrastructure.Investment
is essential to develop existing infrastructure to meet state / federal legal
specifications. These specifications may include environmental regulations like
storm water pollution control measures, seismic safety standards for the construction
of buildings and requisites as per Disabilities Act.
As
per the Department of Transportation's estimates, the state highway requires around
$30 bn for rehabilitation and modernization during 2002 to 2012. A research group,
which ranks the road conditions in the US found that five in ten rough roads (having
a minimum population of 500,000) nationwide were in California. These areas were
Sacramento, San Jose, San Francisco-Oakland, San Diego and Los Angeles. Congestion
during travelhas increased from 1000 miles to 1800 from 1987 to 2000. This resulted
in 530,000 delays in motorist's vehicle-hours leading to wastage of billions of
dollars in terms of fuel and time of drivers. Another area that has been underinvested
is resources area, which includes state parks. State parks have an accumulation
of above $900 mn in deferred maintenance, which affects the quality of experience.
Department of Water Resources (DWR) estimated that around $1 bn to $1.5 bn would
be required for restoring the levees in the state's Central Valley flood control
system. |
