Dave Cox Senate Report: March 2007

Cox Legislation for 2007

The following is a partial listing of the major pieces of legislation I have introduced this year. To get full descriptions of these and all bills in the Legislature, go to www.senate.ca.gov

SB 216 - Identity Theft – Recorded Court Documents

This bill requires the courts in California to change the forms they use to record judgments against individuals in civil or family court to use partial, rather than full, social security numbers. This would preclude identity thieves of a potential source of social security numbers they might use to steal someone’s identity.

SB 282 - State Fair Leasing Authority – CAL EXPO

This bill would establish a Joint Powers Authority to facilitate the financing of capital projects at the Cal Expo state fairgrounds. These facilities could include the Cal Expo race track facility, as well as other building improvements in the Cal Expo Master Plan.

SB 604 - Prison Prosecution – County Reimbursement

This bill requires the state to pay interest on claims from counties paid after 60 days for prosecution of crimes committed in state prisons. Counties cannot afford to front the money for these criminal prosecutions, and the state no longer has any excuse to delay payment for these reimbursements required by law.

SB 878 – Mitigation Measures –Prison Reform

This bill, to be amended on March 26 th, will contain language requiring mitigation to local communities for prison expansion or construction projects.

SB 893 - California First Five Commission – Funding Shift

This bill would abolish the state and local Children and Family (First 5) Commissions and redirect their funds to healthcare initiatives, including California’s Healthy Families program that provides health care coverage for children.

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Public/Private Partenerships In Transportation

Last November, the voters of California passed the largest infrastructure bond package in the history of the United States. The passage of almost $20 billion for transportation alone was a tacit acknowledgement of the failure of traditional planning methods to keep pace with infrastructure demand. Although California spends roughly $11 billion a year in state and federal dollars to fund transportation programs, we have failed to meet the demands of our current population, let alone the five to seven million additional citizens the state will add over the next decade.

While vehicle miles traveled continues to grow exponentially, the amount of revenue collected by traditional funding mechanisms is failing to keep pace. The result has been a growing deficit in which $20 billion will barely put a dent. The result is that California, like many other states, is faced with a choice between finding innovative methods for building infrastructure, or allowing its transportation system to continue to decay.

One innovative method of developing infrastructure being discussed is public-private partnerships (PPP). PPP is a general term to describe financial arrangements in which private enterprises partner with governmental entities to provide a service typically provided by government.

PPP are far from a new concept. In fact, in the development of transportation facilities and public utilities, PPP was the standard practice until the 1930s. Prior to that period of government expansion, investment in massive public works facilities was accomplished through joint public-private ventures, such as the first intercontinental railroad.

There have been a number of successful PPP transportation facilities constructed that have provided state-of-the-art facilities at a fraction of the price to the public. The Route 91 Express Lanes in Orange County was the first public/private partnership completed in modern times in California. This toll road project is still profitable today, although it is now publicly owned.

The State Route 125 project in San Diego connects the only commercial point of entry in San Diego to the regional freeway network. This 11-mile project will complete the missing link in San Diego’s third north-south freeway corridor. The 40-year franchise allows the developer to set market rate tolls and receive a maximum 18.5% return on total investment. It is expected to move 200,000 vehicles per day when fully operational. The project will go from planning to opening in only five years at a total cost of $558 million for which the state shouldered no financial burden.

Public-private partnerships offer a number of unique opportunities, but none so promising as in the area of goods movement. There are a number of areas in and around California’s ports that would lend themselves to PPP and be highly beneficial to all parties. Port-related facilities provide a built-in revenue source and pass economic advantages on to the potential customers. One example would be truck-only lanes. These lanes would be barrier-separated from general traffic and financed by tolls paid by trucking firms. Separating trucks from other traffic would increase public safety, reduce accidents, and alleviate congestion in urban areas.

Another critical issue to consider is the fact that many local transportation agencies have existing authority to enter into PPP and design-build contracts. Particularly in the goods movement arena, there is a huge potential for the development of mutual benefit corporations or joint powers authorities that address goods movement and transportation problems and generate critical infrastructure with little or no state involvement. This was precisely the approach used in the development of the successful Alameda Corridor in Los Angeles. Through the efforts of the municipalities of Los Angeles, Long Beach, and railroads, a multi-billion dollar project was planned, implemented, and constructed that provides significant congestion relief for shippers and the public with limited involvement or financing from the state.

The use of innovative financing mechanisms does not come without significant potential problems. A PPP is similar to leasing a car. The advantage is that the consumer gets to use a car that would otherwise be out of his or her price range. The disadvantage is that the consumer, in this case the government entity, does not have long-term control of the asset. Another area of potential concern involves the use of public right-of-way to develop private facilities. Selling critical right-of-ways to the private sector could make future state infrastructure investments impossible.

As with any new approach to resolving difficult public policy issues, there is no such thing as a free lunch. In order for PPP to work, it must be advantageous to all parties, closely monitored, and controlled to some degree by a public agency to ensure the most beneficial outcome for the taxpayers.

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Budget Update

With health care and prison reform being the major issues that legislators, the Governor, and the media are talking about this year, the state budget is not getting nearly as much attention. In the past, when there have been major budget deficits which had to be bridged in order to pass a balanced budget out of the Legislature it has been the issue that crowded out all others.

When the Governor presented his proposed budget to the Legislature in January, he proudly claimed that it was balanced and would provide a small surplus into the following budget year. Since that time the Legislative Analyst presented her examination of the Governor’s budget and made comments about the assumptions used by the Governor’s Department of Finance to compile the budget proposal. The Legislative Analyst believes that the revenue projections used in January were a bit optimistic, and estimated the total receipts into the state treasury from taxes would be $2 billion lower than predicted by the Governor. The actual revenues coming in to the state during the first few months of the year have been running slightly lower than projected.

The dueling estimates are all part of the budget process that happens every year in the State Capitol. As you read this, legislative budget subcommittees are holding hearings on individual department budgets, issues are being discussed, and numbers are being placed into the Senate and Assembly’s version of the 2007-2008 budget. The real action begins in May, when the Governor issues the “May Revise,” which updates his budget proposal with more recent revenue and expenditure projections, and makes new budget proposals that reflect his priorities for the year. After that, the Assembly and Senate finalize their budget bills, and a conference committee conform both versions into a single budget that is sent to the Governor. The goal of all participants is to complete a budget before the fiscal year begins on July 1st.

You may view the Legislative Analyst’s comments on the budget at:
http://www.lao.ca.gov/analysis.aspx?year=2007&chap=0&toc=0

Information on the Governor’s budget is located at:
http://www.dof.ca.gov/default.asp

For monthly reports of the state’s financial condition go to:
http://www.dof.ca.gov/HTML/FINBULL/FB_Home.asp

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Childcare Resource and Referral Networks

Many families in the First Senate District are in need of finding quality child care for their children while both parents work during the day. Luckily there are resources available in every county in California to help find, improve, and inform people about child care services in their neighborhoods. They are called the Child Care Resource and Referral Network.

The Resource and Referral Network in each county has information for parents about child care agencies in their area. They keep databases showing the types of services available from each child care provider. They also provide programs to train and improve the child care provided in their communities. These services are available for free to any family that needs them. The Network is also available to child care providers who wish to improve their services and to assist them with compliance issues in order to help them stay in business.

If your family needs day care or you are a day care provider that needs assistance, go to:
http://www.rrnetwork.org/index.htm

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Quotes Of The Week

“Winter is in my head, but eternal spring is in my heart.”
- Victor Hugo

“Cross country skiing is great if you live in a small country.”
- Steven Wright

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