LOS ANGELES — California State Treasurer John Chiang said that bond issuance needs to be part of the greater infrastructure financing conversation.
"There obviously is still a great need and underinvestment in infrastructure," Chiang said. "We all saw how voters felt during the election when it comes to critical needs in infrastructure whether it was in the Bay Area or Los Angeles."
Chiang said he anticipates more bond issuance in coming years for water projects, high-speed rail and highway projects.
The treasurer, who is running for governor in 2018, when incumbent Jerry Brown terms out, has opened an independent ballot measure committee for the 2018 statewide election for an affordable housing bond.
Details are sketchy at this point. Only the title of the measure appears on Secretary of State Alex Padilla's page.
"The treasurer has asked me to pull together significant interested parties to work together to see about making a serious dent in the housing problem," said David Townsend, a political consultant and founder and president of Sacramento-based Townsend Raimundo Besler & Usher.
The effort is in its infancy, Townsend said, but they are looking at a bond measure that could help assist homeless people, and support downpayments for working families and poor people.
"It is a serious problem in the state – and we are pushing it very seriously," Townsend said. "The state is about a million and a half units behind where we need to be."
More information on the size of the bond measure and details about how the money would be allocated isn't expected for two or three more months, he said.
"We are pulling all of the people into the room that are experts and trying to get a sense of what works and doesn't work – and then the voters will have to decide," he said.
California voters approved a record 83% or 355 of the state's 430 local tax and bond measures in the November election, including 196 bond measures, according to a report from Michael Coleman, fiscal policy advisor for the League of California Cities.
The $34 billion in facility bonds approved in November included the $1.2 billion Los Angeles housing and homeless services Measure HHH and Santa Clara County's $950 million affordable housing Measure A. Los Angeles County's March 7 Measure H, a quarter-cent sales tax, was winning with 68.72% of the vote, according to preliminary totals.
Chiang has made the state's housing crisis a priority since he was elected treasurer in November 2014.
"The big work we did last year was to rewrite the affordable housing regulations to get greater participation in unused tax credits," Chiang said. "In [former treasurer] Bill Lockyer's last year, they helped finance 14,000 units. We have been able to increase that to 25,000 units."
Chiang said the state is also working to give affordable housing developers more relief.
With President Donald Trump floating a plan to reduce the highest marginal tax credit, investors have been lowering the amount they are willing to pay for them. As a result, Chiang said, developers need to find additional financing to fill the gap to fund the projects.
"People purchase them based on how much benefit they get from the tax credit," Chiang said.
The California Debt Allocation Committee held a March 15 hearing to extend the timeframe developers have to use the funding, Chiang said.
Chiang's staff is also working with Stanford Global Projects on creating an inventory of all the state's needed infrastructure improvements.
A progress report is expected in April on a demonstration project to see if the methodology is sound and the process being applied is workable, according to the treasurer's office.
Chiang has said that creating a reliable inventory is the first step to tackling the state's infrastructure problems.
"We can't have an intelligent conversation unless we understand what California's needs are," Chiang said. "The fact is that this information is siloed in the various departments. It has hindered the best thinking about how to come to terms with the infrastructure needs and the best process to do this."
The treasurer said he wants the state to set aside money for infrastructure when revenues exceed expectations, but he said issuing municipal debt needs to be part of the financing plan.
The state general fund has $75 billion in outstanding bond debt and $35 billion in voter-approved debt that remains unsold.