Our view: More work needs to be done to fix state's fiscal house before borrowing needlessly

Californians are faced with $42.63 billion in borrowing on the Nov. 7 statewide ballot, and at some point we have to say enough is enough.

That's why voters should reject Propositions 1C, 1E and 84.

We've already recommended a yes vote on Proposition 1B -- $19.9 billion for transportation -- and Proposition 1D -- $10.4 billion for school construction. But the borrowing should stop there.

Prop. 1C would let the state borrow $2.85 billion for in-fill development projects and shelters for the homeless and battered women. Prop. 1E would inject $4.1 billion to repair the levee system protecting the San Joaquin Delta, and Prop. 84 would spend $5.38 billion on parks, environmental projects and more flood control.

We're not opposed to the popular goals being used to sell these propositions; who wouldn't want cheaper housing, a cleaner environment and a more secure water supply? But the state can't afford everything on the ballot, and, when push comes to shoving more debt onto our children's tab, we feel transportation and school construction should take priority.

When California borrows money using bond measures, taxpayers are generally required to pay that money back over 30 years. With interest, we end up paying back about $2 for every $1 borrowed. California now owes about $55 billion in general obligation bond debt.

We're not convinced California is completely solvent after amassing huge amounts of debt in the early part of this decade, and until it is, voters should limit how much they let the state borrow. Voters should also be sure that whatever borrowing they do approve is used in an effective way.

Once Prop. 1C, the housing bond, is sliced up into its various programs, it would actually do very little to ease the housing burden in the state.

The same is true of Prop. 84 and its goals -- it's such a large grab bag of goodies that we'll be lucky to notice its impact.

Prop. 1E's focus is on protecting farms and housing in Northern California from floods. While much of our drinking water flows through those canals, Prop. 1E does more to subsidize below-sea level development than to actually protect our tap water. We'd rather see local money or federal grants used there.

The improved roads and new schools funded by Props. 1B and 1D translate into a stronger economy and more growth, which will further help California grow its way out of deficits. The two bonds are also significant enough to make a real impact, the kind of significance that Props. 1C, 1E and 84 lack.

During the four years prior to the 2003 gubernatorial recall, the state's deficit ballooned to $38 billion, mainly because of runaway spending. While revenues were up 28 percent, spending during that same period increased 36 percent.

Since he took office, Gov. Arnold Schwarzenegger has been able to slow the rate of spending growth, wisely suggesting that California can get back on track by bringing growth in spending down to match the growth in state revenues.

But we're still not there. Despite the efforts of the last few years, Sacramento is still running up debt at a rate akin to a college student using his first credit card. This year, state tax receipts were up by $7.5 billion. That's enough to cover the projects in Props. 1C and 1E combined with money to spare.

Unfortunately, or foolishly, the governor's strategy seems to have changed. The 2006-07 budget approved this summer overspends by more than $7 billion -- nearly equal to the jump in tax revenues.

That's not acceptable. And such deficits are expected at least until 2010. We don't want to repeat the budget cuts, rising tuition costs and increases in the car tax we lived with under Gray Davis -- but if the governor and state lawmakers don't get their act together, we will.

Until they do, voters should be cautious when approving more state borrowing at the ballot box. Vote to fund transportation projects and school construction, but vote no on Props. 1C, 1E and 84.