SAN FRANCISCO – State officials have begun an early effort to find ways for California, Washington and Oregon to save money by cooperating on financing future infrastructure projects pegged in the hundreds of billions of dollars.
The Rockefeller Foundation has given Oregon a $250,000 grant to study how the three states could save money working together to finance ailing infrastructure in the West Coast states.
“California has hundreds of billions of dollars of infrastructure needs,” said Tom Dresslar, a spokesman for state Treasurer Bill Lockyer. “There is no way we can place all that burden on the backs of taxpayers. This is an effort to find alternate ways to make those investments.”
All three states are dealing with budget shortfalls and are looking for ways to reduce their debt burdens, while at the same time financing bridges, ports, public water and sewer systems, and dated power grids.
According to the Rockefeller Foundation, the grant is “in support of developing a strategic plan for a West Coast Infrastructure Exchange.” It said it is meant to help speed up innovation for financing infrastructure projects in the three states and to serve as an example for other regions.
“You have all kinds of folks looking at ways to finance infrastructure projects,” said James Sinks, a spokesman for Oregon Treasurer Ted Wheeler. “We are just studying the feasibility of doing this.”
State officials began discussing jointly financing infrastructure projects last year. Oregon Gov. John Kitzhaber and Wheeler held a meeting in Salem to gauge interest from officials from each of the three states. The grant was sought by Wheeler in coordination with Kitzhaber and Lockyer.
Lockyer also hosted a conference call last year to examine public pension fund investment in infrastructure.
Oregon’s Ways and Means Committee on Thursday approved accepting the grant as part of budget legislation. The grant money would be used to hire consultants to perform a feasibility study.
“There are lots of questions and that is why it is not ready for prime time, because we haven’t event started looking at what that landscape might look like,” Sinks said.
Kitzhaber has outlined investment in the state’s overall infrastructure as one of his main efforts to improve its economy.
Financing options that may be examined by the study include the use of public-private partnerships, collaborating on bond issuances and regional project financing.
The effort may have already run into a problem — Washington’s treasurer said the state is uninterested.
“Washington State will not be participating in this effort,” Chris McGann, a spokesman for state Treasurer James McIntire, said in an emailed statement without explanation.
Washington does have major infrastructure financing needs. Gov. Christine Gregoire has asked lawmakers to spend $3.6 billion this year to maintain the state’s transportation sytem. She said projects would be financed through a proposed a $1.50 fee on every barrel of oil produced in the state.
California, as the most populous state in the country, has by far the most urgent infrastructure needs.
Lockyer has repeatedly recommended that the state adopt a long-term infrastructure financing plan that reduces its reliance on the state’s general fund.
The treasurer’s office has said it expects a 127% increase in cost of debt service in the general fund over the next nine years due to more voter-approved bonds and less general fund revenue.
Voters in the state have already approved $10 billion in bond authorization to fund the first leg of a state high-speed rail system, while a $10 billion bond is scheduled for the November 2012 ballot to help improve the state’s water system.
