Voters OK $12 billion in borrowing

<p>SACRAMENTO -- California voters approved another $12 billion in borrowing Tuesday, the latest evidence that no budget problem is too ugly to discourage more charges on the state's credit card.</p><p>The approved bonds, when sold, would mean about three-quarters of a billion dollars in annual debt payments over 30 years.</p><p>The vast majority of the borrowing approved this week -- almost $10 billion -- was to build a high-speed rail system from San Francisco to Los Angeles.</p><p>Voters also backed borrowing to fix up select children's hospitals and to continue a home-buying program for veterans.</p><p>Voters approved the borrowing despite the state's growing budget shortfall caused by the economic downturn.</p><p>Tuesday's election continues a borrowing spree that began at the start of the decade.</p><p>Since 2000, California voters have approved about $85 billion in borrowing for everything from roads to stem-cell research.</p><p>Each borrowed dollar costs roughly $2 to pay back with interest over 30 years.</p><p>State debt payments have increased from about $2.7 billion annually in 2000 to more than $4.5 billion today.</p><p>That ties up more than 4 percent of the general fund, the main source of money for health care, criminal justice and other state services.</p><p>Several states have per-capita debt levels higher than California, a report by the state treasurer's office shows.</p><p>"I think people don't realize that when you approve a bond you're putting something on a credit card," said Jon Coupal, president of the Howard Jarvis Taxpayers Association, which opposed Prop. 1A.</p><p>"Either you're going to have to pay it back or your kids or grandkids are going to have to pay it back."</p><p>Supporters say the state's needs are so pressing that there is little choice but to borrow.</p><p>"If we try to raise taxes or use some other mechanism where we slowly raise money, it's not going to happen," said Jim Earp, executive director of the California Alliance for Jobs, a management-labor construction group, and a member of the California Transportation Commission. "People understand we have an infrastructure system that's broken."</p><p>Earp, who signed a ballot argument backing the high-speed rail bond, said most voters agreed with supporters' argument that the project would create jobs.</p><p>Every $1 billion of transportation spending equals about 20,000 jobs, he said.</p><p>The country's credit crisis could make it much more expensive to sell any of the roughly $56.4 billion in voter-approved bonds that have not been issued.</p><p>"We're going to evaluate the situation after the governor's announcement and make a determination on further debt issuance this year," Tom Dresslar, a spokesman for Treasurer Bill Lockyer, said.</p><p>California voters approve the vast majority of borrowing proposals.</p><p>But not always.</p><p>This week, voters overwhelmingly rejected Prop. 10, a $5 billion bond heavily backed by Texas oilman T. Boone Pickens that would have used the money on various renewable energy and clean-air programs.</p><p>Opponents called the measure a taxpayer giveaway for Pickens' company.</p><p>Bond measures usually attract little well-funded opposition. For example, supporters spent about $2 million on the Prop. 1A campaign, while opponents spent almost nothing.</p><p>In November 2002, amid the collapse of the state's high-tech economy and falling tax revenue, voters approved $18.6 billion worth of borrowing for schools, affordable housing, and water projects.</p><p>Four years later, there were signs that the state's mid-decade revenue spurt was coming to an end.</p><p>Schwarzenegger, legislative leaders and others rallied around $43 billion in borrowing for levees, parks, roads and other projects.</p><p>E-mail Jim Miller at jmiller(at)PE.com (Distributed by Scripps Howard News Service, www.scrippsnews.com.) AP-NY-11-06-08 1149EST</p>