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Updated 11:00am - Nov 26, 2014

Home arrow Opinion arrow Editorials arrow Thomas D. Elias column: Huge debt foisted on future

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Thomas D. Elias column: Huge debt foisted on future

Guess what

‘post-partisanship' really means

After months of rhetoric from Republican Gov. Arnold Schwarzenegger about "post-partisanship," and from Democratic state Assembly Speaker Fabian Nunez about "the end of ‘gotcha‘ politics," it has now become clear what both phrases really mean:

An almost unlimited foisting of public debt onto future Californians, be they new immigrants or the children and grandchildren of today's voters.

The governor and his legislative pals etched that reality in bas relief the other day when they adopted what they quickly labeled a "historic prison reform solution."

Yes, state prisons are under threat of a federal takeover after two U.S. district judges pronounced the penal system an overcrowded failure that both houses tens of thousands more inmates than current facilities were designed to hold and at the same time offers them substandard health care and rehabilitation training programs.

The threat of a federal takeover, with judges demanding as much money from the state as they see fit to finance it, remained real even after the vaunted prison deal was sealed with a two-thirds vote by both houses of the Legislature.

This so-called solution agreed upon – with no public hearings or input – by Schwarzenegger and the legislative leaders of both parties who regularly meet privately with him simply continues the fiscal irresponsibility of the last few years.

schwarzenegger, remember, promised in 2004 that he would "throw away the (state's) credit card" if voters that March passed $15 billion worth of bonds to balance the budget. Paying off the principal and interest on those bonds will cost California about $28 billion, almost all to be part of future budgets.

Broken promise

But Schwarzenegger broke his promise and has been running up the credit card balance ever since. He and his lawmaking pals came back with $38 billion more in construction bonds last year, to be used for roads, schools, parks and myriad other infrastructure projects. Those will cost about $70 billion to repay.

No sane Californian driving today's potholed highways would argue those projects aren't needed. But plenty of responsible Californians argued that the same work could be done faster and at half the price if lawmakers and the governor simply set aside the same amount of cash for the next 15 years that will now be paid each of the next 30 years to finance the bonds.

That idea was pooh-poohed as unrealistic because legislators claimed their successors might not honor any such deal. An unbeatable coalition of labor unions, big business and Schwarzenegger's well-funded campaign committees combined to convince voters to pass those bonds. Again, they were billed as a one-time fix-it plan.

Now comes the prison deal, to be financed by $7.4 billion in "lease revenue" bonds, which do not need to be approved by voters. Those bonds will cost about $15 billion to pay back, for a total of more than $110 billion in debt repayment obligations assumed by the state since Schwarzenegger took office.

The deceptive thing about these lease-revenue bonds is that they will not be quite like those sometimes used to build stadiums and parking garages. In those cases, rent payments and user fees cover bond payoffs. But this time, it will be the state prison system - financed by us, the taxpayers - paying off the bonds.

So applying the term lease-revenue to these bonds is sheer deception, intended purely to further a deal that will take pressure off both the governor and the Legislature. Neither, naturally, wants to seem soft on crime, as might be charged if they did nothing in the face of judicial threats to cap prison populations and force release of some non-violent criminals.

The entire prison deal, of course, can come apart in many other ways not related to financing. If state courts continue to rule that Schwarzenegger cannot exile unwilling prisoners to out of state facilities, the deal will fall through. If communities resist having halfway houses for prisoners placed in their midst, that could also stop it.

But the main problem with this deal is its pure financial irresponsibility, expecting the citizens of tomorrow to fund the solutions for today's problems. Just as with the infrastructure bonds of last year, the responsible way to finance this plan would be on a pay-as-you-go basis without massive interest payments that double its long-term cost.

Appearances first

But after scoffing at this notion last year, lawmakers didn't even give it a thought this spring.

The Legislature's current truth-telling financial watchdog, Republican Sen. Tom McClintock of Ventura County, pronounced the deal "a casual approach to our state's finances," later adding the tag "reckless."

All of which tells us what post-partisanship means when you get down to the nitty-gritty: Do whatever you must to make yourself look well-meaning and good, no matter who you have to smack with the eventual costs.

Reach Thomas D. Elias, a long-time California political reporter: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

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