Good overview on the state debt.
Dan Walters: Debt soars, and more on the way
By Dan Walters - Bee Columnist
Published 12:00 am PDT Tuesday, October 2, 2007
Once upon a time -- a few decades ago -- California was virtually debt-free, at least in terms of state general obligation bonds.
State public works projects, the old-fashioned name for what we now call infrastructure, were largely financed with user fees, such as gas taxes and water charges, or special funds such as royalties on oil production. Schools and other local facilities, meanwhile, were built with fee- or property tax-backed bonds.
That began to change in 1978 when voters passed Proposition 13, which severely limited local property taxes, shifted much of the fiscal burden onto state government, and made raising taxes of any kind almost impossible. Sacramento politicians turned to borrowing for public works projects, even highways, and over the past three decades, we have seen an explosion of state bond debt, including many initiative bonds.
The state now has, according to an exhaustive report issued Monday by Treasurer Bill Lockyer, more than $135 billion in various forms of general debt authorized, of which $57.3 billion is outstanding. The authorized, but still unspent, bonds include the more than $42 billion approved by voters last year, which Gov. Arnold Schwarzenegger has portrayed as no more than a down payment on the more than $200 billion in state infrastructure needs over the next decade. He's currently calling for more borrowing for water storage and conveyance systems.
