SAN FRANCISCO - California lawmakers killed Gov. Arnold Schwarzenegger's public-private partnership bill in a party-line committee vote this week.
AB 2600 was designed to create a broad authority for the state government to enter into what the Schwarzenegger administration likes to call "performance-based infrastructure" projects.
The bill would have allowed arrangements in which a private partner could have assumed responsibility for delivering, improving, operating, or maintaining governmental facilities, including but not limited to roads.
It failed Tuesday on a 5-to-3 vote in the Assembly Business and Professions Committee. The three "yes" votes came from Schwarzenegger's fellow minority Republicans. The five votes to kill the bill came from majority Democrats.
"Given that California is facing huge budget cuts in this economic downturn, it is irresponsible for legislators to turn down billions of dollars in private-sector funding for infrastructure projects," Schwarzenegger said in a statement issued after the vote. "Why should those billions of dollars go to other states and not California?"
The philosophical divide over P3s was laid out in a report prepared by the committee's staff.
"In general, supporters of public-private partnerships assert that California is not likely to meet the infrastructure needs of a growing population without leveraging private sector capital," the report said.
"Opponents assert that public-private partnerships increase costs to taxpayers because a profit margin is built into a fee structure that already includes higher borrowing costs than what is available to public agencies," it said.
One of the formal opponents of the bill was the Professional Engineers in California Government, a union that represents 13,000 state employees.
Since the beginning of 2007, the organization's political action committee reported making more than $700,000 in contributions, almost all to the Democratic Party, party-supported causes, or Democratic candidates - including four of the committee members who voted against the P3 bill.
Schwarzenegger said he would urge lawmakers to reconsider the measure.
