Senate Leader Rejects Borrowing Limit In Governor’s Public Works Plan
Sacramento, CA — The state Senate´s top leader says Democrats in his house won´t accept a limit on bond borrowing that could freeze out projects not included in Governor Schwarzenegger´s massive public works plan.
Senate President Pro Tem Don Perata of Oakland calls the debt limit unworkable and unnecessary and says lawmakers and governor´s need more flexibility, not less.
Schwarzenegger wants the Legislature to approve a constitutional amendment that would limit annual payments on bond debt to six percent of revenue coming into the state´s largest budget account, the general fund.
At the same time, he´s asking lawmakers to approve the sale of $68 billion in bonds to help pay for transportation improvements, flood control efforts, new schools, courthouses and certain other public works projects.
Administration officials acknowledge that adopting the governor´s bond package and imposing the 6 percent limit on debt payments would virtually tie up the state´s ability to borrow by selling bonds for the next decade.