And the hell with the deficit in the state.Project funds poised for release after California bond salePublished: Thursday, Mar. 19, 2009 - 12:00 am
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A state panel Wednesday moved toward releasing $500 million for school, road and housing projects after it froze bond funds in December due to the budget stalemate. The state's Pooled Money Investment Board agreed to release the money as soon as April if State Treasurer Bill Lockyer can sell $4 billion in bonds this month. The board halted funding in December for thousands of public works projects because the state could not access credit markets as lawmakers and Gov. Arnold Schwarzenegger kept the state budget in limbo. Because state leaders enacted a budget in February, Lockyer said he will attempt to sell $4 billion in bonds to investors starting next Wednesday. The board has tentative plans to meet April 3 to review the bond sale and begin releasing the initial $500 million. An estimated 5,300 projects have slowed or stopped since the December action, according to Lockyer spokesman Tom Dresslar. Advocates for environmental groups, local governments and affordable housing testified Wednesday in Sacramento that their bills were piling up, and they face the risk of having their projects fail altogether. "If something doesn't start happening to move this money along, the entire affordable housing industry is going to shut down because we won't be able to finish the projects we have under construction," said Janet Falk, Mercy Housing California vice president for real estate development. "We're not going to be able to start anything new because banks are not going to lend to us." The Pooled Money Investment Board consists of Lockyer, state Controller John Chiang and Department of Finance Director Mike Genest. All three had representatives conduct Wednesday's meeting, as is common practice. The state Department of Finance will set criteria for determining which projects will receive the first $500 million in bond funds, possibly focusing on health and safety projects or those in jeopardy of losing federal funding. Billions more are needed. State projects already have incurred costs of at least $2.6 billion owed by the Pooled Money Investment Account, said Finance Department spokesman H.D. Palmer. Lockyer's office is confident that it can sell $4 billion in bonds and plans to market them to retail investors in New York, San Francisco and Los Angeles. The nonpartisan Legislative Analyst's Office determined last week that California faces a new $8 billion budget problem, but Dresslar said bond underwriters "did not lose any confidence that we were going to complete this deal for $4 billion." Call Kevin Yamamura, Bee Capitol Bureau, (916) 326-5548.
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