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Caltrans Postpones Prop 1B Bond Sale to Reduce State Debt Service

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Despite a delayed $2.3-billion bond sale and possible budget cutbacks, California’s Dept. of Transportation is moving ahead with a number of highway projects that have already broken ground as the governor and legislature continue to try to resolve a $26-billion deficit.

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A spring infrastructure bond sale was delayed until the fall in order to save $250 million in state debt service, says Tom Dresslar, spokesman at the state treasurer’s office. Dresslar adds that Treasurer Bill Lockyer and the governor’s office consulted about the bond sale and decided to postpone rather than cancel. “It was a good thing to do,” he says. “Highway projects that are currently ongoing will continue.”

Caltrans spokesman Matt Rocco says that by law $4.5 billion in Proposition 1B bonds, which include the delayed $2.3 billion portion, need to be sold by the end of 2012, the deadline for funding.

Also complicating future transportation funding is the law passed last year that would replace the gasoline sales tax with a larger excise tax, which would provide more money for the general fund without changing funding levels for transportation. That law was passed by a simple majority and some state officials say that the passage of Proposition 26 in November, which requires a two-thirds majority vote for any tax increases, nullifies the tax swap.

But American Council of Engineering Cos. California’s Executive Director Paul Meyer wrote to Gov. Jerry Brown and encouraged him to not delay the sale of Proposition 1B bonds so that “long-planned, job creating projects will not only put the state in a better position to compete economically, but which are sorely needed by commuters and businesses throughout the state.”

In the ACEC’s continuing battle with Caltrans’ union engineers, Meyer adds in his letter that other “more direct opportunities” to save state funds exist, citing last year’s report by the nonpartisan Legislative Analysts Office that outlined an option to save $200 million per year through the reduction of Caltrans’ staffing to “align the department with its actual workload.” The LAO says 1,500 staff reductions would do the trick.

Meanwhile, Professional Engineers in California Government’s President Matt Hanson last week wrote to Senate President pro Tem Darrell Steinberg (D-Sacramento) and Speaker of the Assembly John Perez (D-Los Angeles) about the current proposed budget requirement of reductions in state employee compensation equivalent to about 10% of payroll. Hanson writes that those savings have been achieved through three day per month furloughs, which restarted last August and are slated to finish in June.

Hanson says PECG proposed to the Department of Personnel Administration to terminate furloughs for its Unit 9 employees and reduce outsourcing for a net saving of $203 million. He says Caltrans has recently issued RFQs for $180 million for private contractors “to inspect the work of other contractors who will be building highway and freeway bridges.”

“Construction inspection is an inherently governmental function that should be performed by experienced professionals who work for and are loyal to the public,” says Hanson.

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