SACRAMENTO – Governor Edmund G. Brown Jr. today said the sale of $1.8 billion in general obligation bonds will help create tens of thousands of jobs and bolster economic recovery efforts by funding major infrastructure projects throughout California.
“When we invest in infrastructure, we provide a homegrown economic stimulus to create jobs and ensure our state is prepared for the challenges of the future,” said Governor Brown. “Investor confidence in California’s fundamental strengths, combined with an on-time, balanced budget, means that we can make important investments to boost the state’s economic recovery and put Californians back to work. I want to congratulate Treasurer Bill Lockyer and his team for negotiating a successful sale for California.”
When Governor Brown came into office, state agencies and departments had more than $13 billion dollars of bond proceeds that had accumulated. He directed agencies and departments to prioritize and expedite the expenditure of those funds. As a result, he was able to cancel last spring’s bond sale and reduce the amount of bonds sold this fall, avoiding hundreds of millions in higher debt payments each year.
State agencies and departments report that all of the proceeds from today’s bond sale will be expended by June of 2012. In addition, agencies and departments are continuing to implement the Governor’s directive to commit unspent bond proceeds to infrastructure projects throughout the state. This means unspent bond proceeds will have been reduced from $13.4 billion in January of 2011 to $3 billion in June of 2012.
The following is a summary of how proceeds from yesterday’s bond sale, as well as existing bond balances, are being put to work:
Caltrans
• Caltrans will be able to start 26 new projects, with a total (multi-year) construction cost of $1.2 billion, with this additional $450 million in bond proceeds. These projects are designed to increase traffic flow by adding lanes, widening roadways, and installing traffic management systems. These 26 projects are expected to create an additional 30,000 jobs.
• These new Caltrans projects described above are expected to leverage an additional $2 billion in non-state funds.
• The existing balance of bond funds will fund 320 ongoing projects through June 2012, with 20 of these projects started in August by using existing bond funds more efficiently. These projects have a total (multi-year) construction cost of $6.6 billion.
• These existing projects will leverage approximately $9 billion in other non-state funds.
Local Streets and Roads
• A total of approximately $38 million in bond proceeds will be used to start roughly 70 local street and road projects. The majority of these projects are general maintenance projects on local roads, such as sealing and resurfacing, but many cities and counties have combined these funds with other local or federal funds to complete larger road projects.
K-12 School Construction
• Existing funding for K-12 school construction will be fully expended by December 2011. The additional $1 billion provided in the fall 2011 bond sale will fund the start of approximately 450 new projects, which is anticipated to consist of approximately 250 modernization projects, 130 new construction projects and 70 other projects. Exact projects will be identified by the State Allocation Board.
California Community Colleges
• Community Colleges will be able to start five new construction and modernization projects with the $24 million in additional bond proceeds.
California Institute for Regenerative Medicine (CIRM)
CIRM’s approximately $190 million in existing proceeds, plus the additional $50 million, will be used to fund the following program activities:
• The first Food and Drug Administration-approved clinical trial for a human embryonic stem cell therapy (for spinal cord injury). CIRM’s $25 million commitment to this project has been matched by a $29 million commitment of private funds.
• 14 Disease Research Teams that are proceeding towards clinical trials of therapies to treat diseases ranging from HIV/AIDS to dry macular degeneration (a common cause of blindness) to neurological diseases such as ALS. One of these awards is a $20 million loan which has generated approximately $20 million in additional funds by the company receiving the CIRM award.
• Training and internship awards to fund the training of almost 900 promising new scientists and technical staff at the University of California, California State University, California Community Colleges and other institutions in California.
• CIRM-funded research and related matching funds are expected to create or retain approximately 5,000 jobs per year and more than $60 million in new state and local tax revenues.
• The current portfolio of stem cell research at CIRM, including the grant programs scheduled through June 2012, have resulted in over 100 scientists and 1,000 other highly-trained researchers being recruited to the state. The Stanford Stem Cell Institute estimates that each of these researchers will bring an average of $1.5 million in research funding to California, for a total of $150 million of additional research funding and associated jobs.
Natural Resource Agency
• The current balance of approximately $4.2 billion is being used by the Resources Agency, including the Department of Water Resources, to fund 7,696 ongoing projects, including over 3,000 parks and trails construction projects, over 1,000 restoration projects, over 600 flood projects and 600 water projects.
• These projects have also leveraged approximately $3.5 billion in non-state funds.
• Departments are using these funds to start an average of 125 new projects per month and this rate is expected to continue for the foreseeable future.