Walters: When California politicians ignore policy risks, failure often results

California s governors and legislators have a very bad habit of enacting major programs and projects without fully exploring their downside risks The greater part spectacular example occurred in when a Republican governor Pete Wilson and a Democrat-controlled Legislature decided to overhaul California s electric power industry The provision was hammered out in lengthy and secret negotiations that participants dubbed the Steve Peace death march for the state senator who ramrodded the effort It was enacted with only cursory population input As a autopsy of the ensuing accident chronicled The act was hailed as a historic improvement that would reward consumers with lower prices reinvigorate California s then-flagging economic activity and provide a model for other states Six years later the reforms lay in ruins overwhelmed by electricity shortages and skyrocketing prices for wholesale power The utilities were pushed to the brink of insolvency and are only slowly regaining their financial footing The state became the buyer of last resort draining the general fund and committing itself to spending billion more on long-term power deals that stretch over the next ten years Other examples of the bad habit abound such as beginning construction of a bullet train linking the two halves of the state with only rudimentary assumptions of its costs ridership and other critical factors a project that limps along nearly two decades later Two others are the immensely costly expansion of pension benefits for society employees a couple of decades ago which has hammered local ruling body budgets and big increases in unemployment insurance benefits without increasing revenues which resulted in a billion debt to the federal establishment that is still growing That brings us to Senate Bill which appears superficially to be a positive effort to expand infrastructure financing but could be another example of unanticipated consequences The measure introduced by Sen Anna Caballero a Merced Democrat would create the Golden State Infrastructure Corporation a state-owned nonprofit company that could borrow money or issue bonds and provide financing for inhabitants or private infrastructure projects State Treasurer Fiona Ma is the bill s sponsor and would appoint the corporation s top executive who would answer to a five-member board of elected personnel and governors appointees By partnering residents and private capital SB enables critical investments in conditions resilience water systems force infrastructure housing and transportation creating jobs and future-proofing California for generations to come Caballero s office contends California can t afford to wait for Washington or for outdated financing systems to catch up with st-century demands she noted in a comment SB is about building a resilient modern California by creating a smarter more flexible way to fund infrastructure that protects our communities creates good jobs and prepares us for the challenges ahead There are aspects to the proposal that should be triggering alarm bells Related Articles Kamala Harris returns to spotlight in major speech slamming Trump After months of lying low Kamala Harris to slam Trump in major new speech Barabak Is there a Republican governor in California s near future Walters New California school content project fulfills Newsom campaign promise Kamala Harris to give remarks in San Francisco as President Trump marks th day in office There is no limit on how much debt the corporation could incur The state would also not be liable if its financial structure collapsed The decisions on financing private projects could be made secretly because the corporation would be exempt from particular open meeting and open records laws The danger here is that with a potentially unlimited amount of money to be handed out with no population input the political figures on the corporate board could be swayed to play favorites for reasons disconnected from infrastructure improvement We ve seen scandals of that sort elsewhere in state leadership such as in the Coastal Commission s land use decisions and the California Residents Employment Retirement System s investments Without better safeguards and more sunshine this is another shame waiting to happen Dan Walters is a CalMatters columnist