Sacramento, CA — Governor Schwarzenegger´s attempt to cap state bond debt payments will be getting its first legislative test this week.
The governor is seeking a constitutional amendment that would limit principal and interest payments on state bonds to six percent of general fund revenue.
He says the cap would prevent too much of the general fund from being used to pay off bond debt. But critics say the cap could cripple the state´s ability to respond to a major earthquake or other disaster.
They also argue it could freeze out bonds to pay for parks, wildlife habitat protection, housing and other projects not covered by the governor´s public works plan.
The Senate Budget and Fiscal Review Committee has scheduled a hearing for Thursday on the proposed cap.