Wisely rebuilding infrastructure is key to economic health

California’s voters have repeatedly approved funding for California’s infrastructure, such as highways, bridges, and schools.  The gas tax, sales tax on gasoline, $40 billion of bonds in 2006, another $10 billion this year and local sales tax measures are all dedicated to transportation and other projects.  These are authorizations, even orders, from the electorate to improve our infrastructure.  

Implicit in this directive is a requirement that government not waste the money the voters approved.  Everyone knows how to get the best bang for the buck, whether it’s for a highway, a bridge, a dam, or a school building.  An experienced engineer designs the facility at a fair and reasonable price.  A construction contract is awarded to a qualified firm offering the lowest bid.  Inspectors who work for the public, not another contractor, inspect the construction to be sure it meets the required plans and specifications.  That’s the way to ensure that the money the voters approved builds the most projects with high quality results.  

California, like the rest of the nation, needs to get the economy back on its feet.  The best way to do this is through creating jobs and reducing unemployment.  One billion dollars of highway infrastructure projects generate 28,000 jobs!  This assumes, of course, that the money is spent wisely.  

Unfortunately, government money can lead to private greed and waste.  The Legislature and the Governor’s Department of Finance have concluded that outsourcing an engineering job, such as design and construction inspection, to private firms costs the taxpayers $217,000 per year, compared to $121,000 for a state employed public servant to do the same job.  Nevertheless, there is a renewed push to outsource more work.  

Even worse, such catchy terms as Design Build and Public Private Partnerships are being urged by firms which wish to receive overpriced monopolistic government contracts without competitive bidding.  Wherever these approaches have been tried in California, they cost the taxpayers twice what the projects are worth, with the excess profits frequently going to foreign banks and investors.  
Toll lanes were added to a section of the Riverside Freeway.  A monopolistic no-bid design build contract increased the cost from $ 57 million to $130 million.  Ultimately, the taxpayers, who weren’t supposed to pay anything for the Public Private Partnership project, spent $207 million dollars to buy it out.  

The same story is being repeated on a Route 125 toll road in San Diego.  The $360 million project ballooned to $843 million and opened a year late.  The toll road investor was allowed to pocket ten additional years of tolls before turning the road over to the public, costing “hundreds of millions of dollars” to taxpayers and toll payers, according to the state’s Department of Finance.   

These are just two examples of the huge waste of public money that results from eliminating such common sense practices as competitive bidding for construction contracts and public inspection of private construction.

The Governor has proposed to furlough state employees, telling them to stay home and not get paid two days per month.  State engineers and many others are paid through special funds, so cutting their pay will not put a drop into the $42 billion General Fund deficit bucket.  Instead, furloughs will delay preparing projects to be ready to go to construction to create new jobs.  

The federal government is expected to make available more than $85 billion of infrastructure funds to states, based on whether their projects are ready to go to construction to create jobs.  If California doesn’t have projects ready for construction, the money will go to other states and our job creation opportunity will be lost.  Ordering engineers to stay home will almost certainly result in the ultimate loss of federal funds for California.

These are difficult economic times.  The taxpayers’ money needs to be spent wisely to create jobs and help revitalize the slumping economy.  There should never be a time when we waste taxpayer money. Let’s keep Californians working on California’s jobs and give the taxpayers the best value for their money. 

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