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    In Depth/Perspective

    CA Senate Repubs Balk At Dem-Drafted "Infrastructure" Bond For June Ballot; Dem. Sen. Leader Perata Says "Now We're Talking About November"; Gov . Schwarzenegger Says He's Ready To Meet Over Weekend

    Measure Included $2 Billion For CA Ports Without Requiring No Net Increase (Or Real Decrease) In LB-LA Port Pollution


    (March 11, 2006) - In an extraordinary post-midnight session this morning, the CA Senate in Sacramento did not approve a massive taxpayer-funded infrastructure bond, sought by some for placement on the June ballot.

    "Now we're talking about November," State Senate President Pro Tem Don Perata (D., Oakland) said shortly after midnight on the Senate floor after the measure failed on a party line vote (Dems in favor, Repubs opposed).

    But minutes later, Governor Arnold Schwarzenegger released a statement indicating he was still ready to meet over the weekend to put a measure on the June ballot.

    The "Perata/NķŮez" plan -- $47 billion in proposed spending named for its Democrat co-authors -- required a 2/3 vote in the 40 member State Senate (currently comprised of 25 Democrats and 15 Republicans), effectively meaning Democrats needed Republicans to get the measure on the ballot.

    The proposed ballot measure, which had been the subject of closed-door meetings for days, wasn't unveiled until about 10:00 p.m. March 10. It includeds provisions to funnel billions of dollars toward expanding the capacity of CA's ports, benefiting "goods movement" interests at the Ports of LB and L.A...but without requiring that CA's largest Ports (LB/LA) produce "no net increase" or a net decrease in pollution for impacted residents and taxpayers.

    A major sticking point appeared to be upgrades for northern CA levees. Democrats argued in favor of the proposed spending measure; Republicans blasted it as a costly sham. The final vote was 24-12 with two Republican Senators (Battin and Morrow) recorded as not voting and one Democrat (Vincent) absent.

    Although the Secretary of State's office indicated that a Monday (March 13) deadline for the June ballot was technically possible (but difficult), Democrat leader/State Senate President Don Perata (D., Oakland) said on the Senate floor he believes the deadline for the June ballot has effectively passed. "Now we're talking about November," Sen. Perata said.

    Sen. Perata criticized Gov. Arnold Schwarzenegger for, in effect, not being able to get Republicans in line on spending the Governor had indicated he wanted.

    "I will tell you that for us to re-engage there is going to have to be a very clear set of negotiations set forward by the Governor," Senator Perata said, adding Gov. Schwarzenegger "is going to have to tell us what he wants from us and how he wants to proceed because I donít want to hear anymore that we don't know what's in this...This was not delayed tonight because of Democrats, and I donít think it was delayed tonight because of Republicans. It was delayed tonight because we did not have the leadership necessary."

    As for the future of a June ballot measure, Sen. Perata said, "I don't think there is anybody in here who does not want to get something done, and we still have an opportunity, but I think the best opportunity has passed us by. So let us redouble our efforts. In the future, I assume after what was said here this evening, that nobody is going to want to something pasted together over the weekend and thrown on your desk on Monday. I certainly don't. That would be wrong. So we are now talking about November..."

    During Senate debate, State Senator Tom McClintock (R., Thousand Oaks) lamblasted the Democrats' spending plan...saying it didn't pass muster even when applying the major infrastructure expansion undertaken under former Democrat Governor Edmund G. "Pat" Brown:

    Sen. McClintock: ...During those years we built the finest highway system in the world, one of the largest water projects in history and the foremost university system in the country...Now, for a reality check, in all eight years combined of the Pat Brown administration, Gov. Brown borrowed the equivalent, using modern inflation adjusted dollars, of $20 billion in general obligation bonds. The proposal now before us is to borrow nearly $50 billion...

    Again in 2006 inflation adjusted figures, Pat Brown spent less than $1,500 per person in his final year in office of general and special funds combined. Today, we're spending well above $3,000 per person.

    When Pat Brown finished this remarkable era of public works, our entire debt service ratio was just 2.2%. Before embarking upon this new borrowing binge, our debt service ratio is 5.9%.

    In his last year in office, the inflation adjusted general fund deficit, again using 2006 inflation adjusted dollars, was less than $700 million. Ours is nearly $6 billion dollars.

    In past days, our credit rating was the highest in the country. Today our bond rating is the lowest in the country.

    So here we are at a fiscal paradox. Despite record borrowing, we have nothing to show for it, and despite record spending we can't seem to scrape together enough money to build a decent road system or educate our kids or protect our families from predators.

    Shortly before 1 a.m., Governor Schwarzenegger's office issued a statement suggesting that in the Governor's mind, a June measure wasn't dead yet.

    Gov. Schwarzenegger statement: First of all, I want to thank Senator Perata, Speaker Nunez, Senator Ackerman and Assemblymember McCarthy for all of their hard work this week. We have worked late into the night for the third night in a row, and I am encouraged by the tremendous progress we have made. California is adding 500,000 people a year and Californians deserve to have leaders that act responsibly now so we can be ready for the future. For too long, Californians have been stuck in traffic, sent their children to dilapidated schools and lived behind levees with less flood protection than New Orleans. I will work throughout the weekend to do what the people have sent us to Sacramento to do. Both Democrats and Republicans need to keep working towards building a future that the people of California deserve."

    The Perata/NķŮez measure included $2 billion to create a "Trade Corridors Improvement Fund" for allocation by the CA Transportation Commission "for infrastructure improvements along federally-designated 'Trade Corridors of National Significance'" -- language inserted in the 2005 federal Transportation bill at the urging of the Port of LB and Mayor Beverly O'Neill, facilitated by Cong. Juanita Millender-McDonald (D., Carson-LB) -- "or along other corridors within this state that have a high volume of freight movement, as determined by the commission."

    However the text of the proposed ballot measure [AB 134 as amended]) doesn't tell voters exactly what projects their money would fund. It leaves that until after voters approve the measure...when the process would be controlled by various government agencies.

    For the $2 billion allocated to the "Trade Corridors Improvement Fund," the process would be as follows:

    In determining projects eligible for funding, the [CA Transportation Commission] shall consult the trade infrastructure and goods movement plan submitted to the commission by the Secretary of Business, Transportation and Housing and the Secretary for Environmental Protection. No moneys shall be allocated from this fund until the report is submitted to the commission for its consideration, provided the report is submitted no later than August 1, 2006. The commission shall also consult trade infrastructure and goods movement plans adopted by regional transportation planning agencies, adopted regional transportation plans required by state and federal law, and the statewide port master plan prepared by the California Marine and Intermodal Transportation System Advisory Council (Cal-MITSAC) pursuant to Section 1760 of the Harbors and Navigation Code, when determining project eligibility for funding. Eligible projects for these funds include, but are not limited to, all of the following:

    • (i) Highway capacity improvements and operational improvements to more efficiently accommodate the movement of freight, particularly for ingress and egress to and from the state's seaports, land ports of entry, and airports, and to relieve traffic congestion along major trade or goods movement corridors.
    • (ii) Freight rail system improvements to enhance the ability to move goods from seaports, land ports of entry, and airports to warehousing and distribution centers throughout California, including projects that separate rail lines from highway traffic, improve freight rail mobility through mountainous regions, and other projects that improve the efficiency and capacity of the rail freight system.
    • (iii) Projects to enhance the capacity and efficiency of ports.
    • (iv) Truck corridor improvements, including dedicated truck facilities or truck toll facilities.
    • (v) Border access improvements that enhance goods movement between California and Mexico and that maximize the state's ability to access coordinated border infrastructure funds made available to the state by federal law.
    • (vi) Surface transportation improvements to facilitate the movement of goods to and from the state's airports.

    In allocating the funds benefiting Ports, the text only mentions pollution as one of several factors to consider...and without requiring the Ports of LB-LA (the state's biggest ports) deliver a net decrease or no net increase in pollution now said to be harming public health at current levels. Instead, the CA Transportation Committee would allocate the $2 billion in a manner that:

    (i) addresses the state's most urgent needs, (ii) balances the demands of various ports (between large and small ports, as well as between seaports, airports, and land ports of entry), (iii) provides reasonable geographic balance between the state's regions, and (iv) places emphasis on projects that improve trade corridor mobility while reducing emissions of diesel particulate and other pollutant emissions. In addition, the commission shall also consider the following factors when allocating these funds:

      (i) "Velocity," which means the speed by which large cargo would travel from the port through the distribution system.
    • (ii) "Throughput," which means the volume of cargo that would move from the port through the distribution system.
    • (iii) "Reliability," which means a reasonably consistent and predictable amount of time for cargo to travel from one point to another on any given day or at any given time in California.
    • (iv) "Congestion reduction," which means the reduction in recurrent daily hours of delay to be achieved.

    An additional $1 billion would also be made available to the CA Air Resources Board, an agency which has refused to rescind a controversial "Memorandum of Understanding" with CA's two major RRs despite opposition from the City of LB and the AQMD. The $1 billion would be "for emission reductions, not otherwise required by law or regulation, from activities related to the movement of freight along California's trade corridors. Funds made available by this paragraph are intended to supplement existing funds used to finance strategies and public benefit projects that reduce emissions and improve air quality in trade corridors commencing at the state's airports, seaports, and land ports of entry."

    While supporting reduction of pollution and adopting a self-declared "Green Port Policy" to help produce reductions, the Port of LB has thus far refused to commit to "no net increase" in pollution (or a net decrease in pollution). At the same time, the Port continues to push for taxpayer-funded projects that will increase Port capacity and facilitate more growth. (Example: If pollution from a source is decreased X% but the source itself grows by 2X%, net pollution will increase.)

    The City of LB, via its City Council, has on multiple occasions supported state legislation calling for "no net increase" in pollution...and two of LB's three major candidates for Mayor -- Councilman Frank Colonna and retired Councilman Doug Drummond -- have both publicly endorsed "no net increase" in port-related pollution...and gone further to call for a net decrease in pollution. (The Mayor appoints LB's Harbor Commissioners, who under the current City Charter are non-elected and non-recallable.

    In Mayoral fora at CSULB and the Wrigley Association and in TV ads, candidate Bob Foster has supported making the Port cleaner...but has consistently stopped short of supporting measures to require "no net increase" in PoLB related pollution (or a net decrease). When asked by LBReport.com in Sept. 2005 if he supported Sen. Alan Lowenthal's "no net increase" legislation (a measure the Port opposed in 2004 on which it's publicly neutral now but the Council unanimously endorsed in 04 and 05), Mr. Foster said, "I want to look at the consequences of that before I really make a decision on it," adding "We've got to do a lot more, and whether it's Alan's bill or some other effort, we've got a lot to clean up here."

    Mr. Foster is endorsed by the LB Area Chamber of Commerce...which opposed Lowenthal's "no-net-increase" legislation in 2004...and opposes publicly now.

    Senator Lowenthal, a Democrat, has endorsed fellow-Democrat Foster for Mayor. So has Senator Lowenthal's daughter-in-law Suja Lowenthal, who's now running to represent the Port-impacted 2d Council district (after earlier filing for reelection to LB's schoolboard).

    The proposed bond would have made available $100 million (1/20th of the funds to increase Port-related transportation) to the CA Office of Emergency Services for "port, harbor, and ferry terminal security improvements."

    The Senate and Assembly had been scheduled to meet on the measure late Friday afternoon, then early evening, then members were told to be on "two hour call" of the Speaker, then the Assembly announced it wouldn't meet until Monday (apparently the very last drop dead date for the June ballot).

    Then the Senate was supposed to meet at 9:00 p.m. Friday..and LBReport.com monitored the proceedings via the internet.

    At about midnight Saturday morning, website audio burst through from Sacramento as the Senate went into session. Republican opposition held firm...and the Dem-backed measure failed on a basically party-line vote (two Repubs "not voting").

    Senator Perata's office posted the following transcript of his floor statement on the internet:

    Sen. Perata:: I just want to correct a few things. The bond includes $1.4 billion for parks and $4.1 billion for flood control. The reason we did 4.1 instead of the full 6 is because the governor and we decided that the locals should have the responsibility that statutorily is there today, to pay their fair share.

    We punted on the federal government but we were not about to say we cannot control the feds we will not control the locals.

    3.9 billion dollars of the flood control is direct repair and improvement. So letís just be honest about something. We have given this administration everything it needs to do the job as fast as it needs to get done and can get done.

    I donít know about some of you but I read the DWR [Dept. of Water Resources] report. It came out last year. It was a modification of a report that came out two years before that. This has been a persistent problem and I donít think there is any doubt that the money there, forget everything else -- that the money is there for this administration to fix those levees. I donít care how you stack it up, something goes wrong, somebody is going to be looking for somebody.

    The remaining money was for flood subvention, like the Yolo Bypass. I finally figured out one day why that has water sometimes and not others. Itís so the rest of the place isnít flooded. Somebody thought that through pretty well. So we thought if it works in the Yolo Bypass, what the hell, why donít we let it work in other places.

    On storage, the governor said he needed a dam above and the equivalent of a dam underneath, and we gave him both. Now we can argue all we want about whether Perris Island, or Perris Lake or whatever, and Iím really sorry a lot of people moved around there. But the fact of the matter is if you want to build a dam anywhere, somebody is going to have to pay for it and somebody is going to be inconvenienced.

    And since the state Cal-fed plan says there has top be a second Diamond Valley somewhere in Los Angeles, we thought it was a pretty good opportunity to build that one now, and when Cal-fed finally figures out where the rest of this stuff should go, we can make decisions about that.

    So, on with what the governor wanted, and if you thought this was a sucker punch in the last minute, I sat with the governor yesterday -- so did the speaker -- and he said I want a dam. Now we can argue forever where that dam ought to be, but no oneís going to tell me that is not a dam. It is there now. Seismically, there is no seismically safe dam in California. The reason they are taking it down is because it doesnít work. When they rebuild it, I assume they will build it to work.

    So weíre going to go back to work ourselves, and whether or not we get anything on the November ballot remains to be seen. But I will tell you that for us to re-engage there is going to have to be a very clear set of negotiations set forward by the governor. He is going to have to tell us what he wants from us and how he wants to proceed because I donít want to hear anymore that we donít know whatís in this.

    Youíve got a responsibility just like I do. This was not delayed tonight because of Democrats, and I donít think it was delayed tonight because of Republicans. It was delayed tonight because we did not have the leadership necessary. Now there has been a meeting going on for the last couple of hours across the way. That tells me that maybe weíre doing the dozens here.

    Now if you want to be played off against one another thatís up to you. I donít want to play that game. I believe that the Senate can come up with a reasonable plan. We couldnít do it tonight, but if Dick and I had to do it over again, I bet you we would be doing it differently.

    So tonight I am going to ask for this vote to go up. I hope that the discussion here tonight will be taken constructively. I don't think there is anybody in here who does not want to get something done, and we still have an opportunity, but I think the best opportunity has passed us by. So let us redouble our efforts. In the future, I assume after what was said here this evening, that nobody is going to want to something pasted together over the weekend and thrown on your desk on Monday. I certainly don't. That would be wrong.

    So we are now talking about November. Weíre talking about months ahead, then weíre talking about the political season heating up. Let me end on this note. Pat Brownís name was invoked a lot tonight. Jerry Brown's was not...

    As we post, the proposed June bond measure's future is uncertain...with Governor Schwarzenegger indicating he's ready to work over the weekend, the Assembly next scheduled to meet on Monday...and Senator Perata saying "nobody is going to want to something pasted together over the weekend and thrown on your desk on Monday."


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