Lawmakers OK $13.4 billion in revenue bonds

The Associated Press
Tuesday May 08, 2001

SACRAMENTO— Calling it “the only way for the state to stay afloat,” Democratic lawmakers dodged Republican opposition Monday and authorized up to $13.4 billion in revenue bonds for state power buys. 

The state Assembly approved the measure 49-29, enough to forward it to the state Senate, but not the two-thirds needed for the measure to go into effect immediately. 

“Our objective is to start the clock running so the state is not caught without any funds,” said Assembly Speaker Robert Hertzberg, D-Van Nuys. 

First, Democrats tried to pass the bill by the two-thirds majority needed to allow it to take effect immediately. That failed. 

The Assembly then passed the bill with the Democrats’ simple majority, and leaders said they will end the special energy session this week to speed up the sale of the bonds. 

Any bill passed by a simple majority during an emergency session must wait 90 days after the session ends before it can take effect. 

There’s concern, however, that the delay could endanger a $4.1 billion bridge loan that would replenish the state general fund in time for budget debates in June. 

Since January, the Department of Water Resources has bought power for customers of three cash-strapped utilities. The money will be repaid by the $13.4 billion in revenue bonds expected to be issued in June. The bonds will be repaid over 15 years by customers of San Diego Gas and Electric Co., Southern California Edison and Pacific Gas and Electric Co. 

Assembly Republicans said the state should spends its $5 billion budget surplus on energy and issue bonds for the remaining $8 billion. 

“If you have money today, you don’t borrow against your children’s and grandchildren’s futures,” said Assemblyman Tony Strickland, R-Thousand Oaks. 

Assemblywoman Lynne Leach, R-Walnut Creek, said the measure would build up debt without “a firm, long-term energy plan.” 

But during the nearly three-hour debate, during which blackouts rolled through northern and southern parts of the state, Democrats said that would drain the general fund and cut into services. 

“It’s our responsibility today to keep the government running,” said Assemblyman Dennis Cardoza, D-Atwater. 

Gov. Gray Davis, whose plan to dig the state from the crisis included issuing the bonds, Monday accused Republicans of “obstructing the solution” to the statewide energy crisis. 

“Their decision to play partisan politics with the energy crisis seriously complicates the budget process and could ultimately threaten our economy,” Davis said in a prepared statement. 

Meanwhile, state power buyers said Monday they expect to draw another $500 million from the state general fund to buy electricity, bringing California’s power-buying tab to $6.7 billion. 


On the Web: Read SB31X at http://www.sen.ca.gov