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FOR IMMEDIATE RELEASE
Contact: Sharon Hawkins 916.341.1000
August 20, 1998

THE CALIFORNIA BUSINESS ROUNDTABLE PROPOSES INNOVATIVE FUNDING SOLUTIONS TO MEET STATE'S CAPITAL INVESTMENT NEEDS

State's Top Business Executives Hope to Spark Dialogue Among Gubernatorial & Legislative Candidates

(Sacramento, California) - In a precedent setting report, the California Business Roundtable today defined a comprehensive array of innovative funding solutions to meet the state's needs for schools, colleges, parks, water systems and transportation without raising taxes. Entitled, "Building a Legacy for the Next Generation," the Roundtable's report is the first comprehensive look at California's existing capital investment needs. The report is intended to inspire dialogue among legislative and gubernatorial candidates and establish capital investment funding as a priority of the next Administration and Legislature.

Building a Legacy highlights some of the real-life impacts of insufficient funding, including: elementary school children kept home because their rundown classrooms are too dangerous to attend; paved roads being converted back into gravel because local agencies can't afford to maintain them; and University of California physics students evacuated from their laboratories periodically to keep them from suffocating.

These are all scenes from California today that are repeated in thousands of different ways all over the state. Together, the California Business Roundtable estimates, they add up to a $90 billion overdue bill for new public facilities. After reviewing available resources, including federal funds and other non-general fund sources, as well as bonding capacity, the Roundtable identifies nearly $33 billion unmet need.

"These needs must be addressed in a coherent, comprehensive fashion," said Phil Quigley, Chairman of the Roundtable and retired Vice Chairman of SBC Communications. "Until now, California has had independent proposals and piecemeal agendas. This report allows us to look at California's needs and go after them with a unified Blueprint."

Quigley said that the business leaders are publishing their study now in order to make certain that the need for new schools, highways and colleges will be a major issue in the upcoming political campaigns. "We don't claim to have a solution for everything. But we do hope to inspire dialogue among key constituencies in California and between state legislative and gubernatorial candidates this election. Innovative solutions to our state's capital investment needs should be one of the top priorities of the next Administration and Legislature."

The California Business Roundtable just last month revealed that 61% of the public is dissatisfied with the current condition of our schools, highways and roads. And 66% agree that the decline of these public facilities has a direct negative effect on the quality of life in California and the economic vitality of our communities.

The specific policy recommendations in the report include:

  • dedicating a quarter-penny of future sales tax growth over the next ten years for investments in public facilities
  • requiring a 50% local match for K-12 school construction
  • leveraging public and private investment in public facilities by making better use of existing financing mechanisms such as the California Infrastructure and Economic Development Bank;
  • encouraging developer design, build and transfer agreements for school construction and reducing allowable construction costs
  • allowing state and local agencies greater authority to pursue entrepreneurial partnerships for the development of public capital facilities, particularly in the transportation sector. Implementing the first two recommendations, alone, — dedicated sales tax (11.8 billion), and 50/50 local match for school construction (14.2 billion) — would fund almost 80% of nearly $33 billion in unmet needs.

"We owe our modern prosperity to the legacy of the last generation of Californians — the schools, highways and institutions of higher learning that they paid to build," said Gary H. Hunt, Executive Vice President & Corporate Secretary of The Irvine Company and Chairman of the Infrastructure Task Force.

Hunt noted that previous generations of Californians made a major commitment back in the 1960's to building the schools, colleges, parks, water systems and highways we enjoy today. "Just think of all the changes that have occurred in this community of California in the 30 years since. Forty-four percent of the state's current population wasn't even alive thirty years ago. An estimated nineteen percent have moved here in that period. Five percent of our population didn't live in California even ten years ago.

"With this report, we are issuing a challenge to this new generation of Californians to carry this commitment forward. We all agree on the need to meet this responsibility. Our task has been finding a way to pay for it," Hunt concluded.

The California Business Roundtable is a non-profit nonpartisan organization composed of the chief executive officers of California's leading corporations. For more than twenty years the Roundtable has worked closely with the governor and the legislature to provide leadership on high priority public policy issues. Copies of the report may be obtained from the California Business Roundtable by calling 916.553.4093.


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