Schwarzenegger wants to borrow billions to build new prisons, schools, dams

Gov. Arnold Schwarzenegger on Tuesday proposed another huge round of borrowing to build prisons, schools and dams in a state of the state speech that also called for cleaner fuels to help curb global warming.

The borrowing proposals for the United States' most populous state, which add up to $43.3 billion (Ђ33.26 billion), are similar to ideas that were cut out of the enormous borrowing plan the governor put forth last year. The Legislature changed it and cut it in half, and voters eventually approved $42.7 billion (Ђ32.8 billion) in bonds in November.

Addressing a joint session of the Legislature, Schwarzenegger said he was bringing the ideas back because, "We are a big state, and we have big needs."

"And we made a big down payment, but the job is not finished," he added.

The governor is calling for $29.4 billion (Ђ22.58 billion) in general obligation bonds, which require voter approval, and $13.9 billion (Ђ10.68 billion) in lease revenue and other bonds, which the administration says would not need to be approved by voters.

Schwarzenegger also addressed global warming.

He said cars should run on cleaner-burning fuel to help reduce greenhouse gases that experts say are warming the Earth's atmosphere. He proposed that California become the first state to develop a carbon fuel standard.

"Let us blaze the way, for the U.S., for China and for the rest of the world," Schwarzenegger said. "Our cars have been running on dirty fuel for too long. Our country has been dependent on foreign oil for too long."

Schwarzenegger wants California refiners to reduce the carbon content of passenger vehicle fuels 10 percent by 2020.

Schwarzenegger said the state needs new prisons to relieve overcrowding, which he called a disgrace. The prisons are so full that the federal courts are threatening to intervene by capping the inmate population and potentially ordering early releases of criminals.

"Here are the court-ordered choices we face," Schwarzenegger said. "We build more prisons or the court takes money from education and health care and builds the prisons itself. I am not in favor of releasing criminals. I am not in favor of taking money from classrooms and emergency rooms to build cells."

Schwarzenegger also wants to spend $4 billion (Ђ3.07 billion) on new dams in Northern California and near Fresno, an idea Democrats and environmentalists vehemently oppose. He wants to spend another $500 million (Ђ384.08 million) on ground water storage.

Schwarzenegger said the dams are necessary to store more of the water from Sierra snowmelt, which could be reduced by global warming. Two-thirds of Californians depend on the snowmelt for drinking water. Central Valley farmers also use it to irrigate their fields, reports AP.

Schwarzenegger's finance director, Mike Genest, said the state can afford the new borrowing because it is paying off early the bonds voters authorized in 2004 to pay off the budget deficit that ballooned after the dot-com crash.

"We think this is affordable within the state's budget in the long run," he said.

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