Reuters is reporting California needs billions in bonds.
“I was at a meeting this morning where someone said, ‘Look, we need $150 billion just for infrastructure and transportation.’ It’s true,” Schwarzenegger told Reuters in an interview in a state office in San Francisco.
“We need $500 billion to rebuild California the way it ought to be,” he added. “But this is of course too big for people to digest, so you don’t talk about that.”
Speaking about the total of $42.7 billion in general obligation bonds authorized by voters last year for public works spending, Schwarzenegger said: “This was only the foot in the door, to whet the appetite.”
In the short term, Schwarzenegger acknowledged California could face lower tax revenues than projected in his January budget plan, but said he opposed new taxes.
“We have done tremendously with the revenue increases, but we do not want to do a tax increase.”
He said he does not expect California to issue less debt if the economy slows. “I don’t think we have to do that,” he said.
This is so staggering that all I can do is repeat the sound bytes.
- $42.7 billion in general obligation bonds issued last year is “only the foot in the door, to whet the appetite.“
- It will take $500 billion to “rebuild California the way it ought to be“.
- $500 billion is “too big for people to digest, so you don’t talk about that” even though he is talking about it.
- California needs $500 billion even though it has “done tremendously with the revenue increases“.
- California will not issue less debt even if the economy slows.
- California “could face lower tax revenues” but he opposes tax hikes.
The US Census Bureau QuickFacts estimates the 2005 California population at 36,132,147 as the following table shows.
Let’s do the math. $500,000,000,000 / 36,132,147 is $13,838 dollars for every man woman and child in the state. That might not sound so bad but I do not think many 5 year olds have that much cash lying around. Let’s try the numbers again with the working age population (18-64). The working age population is 22,546,460 (calculated manually). That translates to a staggering $22,176 liability for every working age person. Married couples would need to pony up a mere $44,352 per couple to do it “the way it ought to be done“, and remember those are after tax dollars.
But there are some other figures to look at, such as 13.8% of the California population is below the poverty level, and the median household income clocks in at $48,440. (QuickFacts shows those numbers are as of 2003).
This looks like fiscal insanity no matter how many years he wants to stretch this out over. The kicker is that Schwarzenegger thinks this can be paid for without increasing taxes, in the face of falling revenues, even if the economy heads into a recession. Mark my words California, your taxes are going to skyrocket if anything remotely close to this proposal passes.
Mike Shedlock / Mish/