Discussions started with the Chair citing from a letter from the Treasurer’s Office, the Treasurer’s estimates of what the rational bonding capacity levels for the next few years would be for all purposes. The Department of Finance (DOF) representative provided the Departments perspective on the same issues. Although stated in different ways they were essentially the same. DOF said for 2002 a total bond package of $15 billion with $12 billion for education. For 2004 $10 billion with $6 to $7 billion for education, and the same for 2006. The Treasurer said $24.6 billion for the period before 2006. DOF says $25 billion for the 2002 and 2004 election cycles and the Treasurer says $24.6.

The committee seemed to settle on a total package of $12.8 billion, with $2.4 billion for higher education. The higher education portion was divided as follows: UC $700 million, CSU $700 million and Community Colleges $900 million. Another $0.1 million was divided half for joint use and intersegmental projects and half for new campuses or off campus centers. The amount of the bond to be available for 2004 was to be $10 billion with the breakdown between higher education and K-12 not yet determined. The committee decided to put both bonds in one piece of legislation and provided for an election in March 2002 and another election in November 2004.

When the committee adjourned the audience was pretty upbeat that an agreement was close and the likelihood of a bond reaching the Governor was pretty high.

A behind the scenes meeting occurred around midnight and the conferees of the conference committee were allegedly directed by the leadership of both houses to restructure the package for $11.4 billion in both 2002 and 2004. Information is not yet available on the structure of the 2004 proposal, but the 2002 Higher Education portion is now $2.3 billion with the allocations set as $700 million for UC, $700 million for CSU and $900 million for Community Colleges. Interestingly, the total package is still $22.8 billion, but no longer front-loaded for K-12.

This is the last day of the 2002 session of the Legislature. This is a time when normal rules of operation and procedure are some times short-circuited in the interest of pushing various agendas. The final outcome of the bond package is impossible to predict. The chances of it reaching the Governor’s desk are far greater than most observers had thought possible as recently as 24 hours ago. The odds on the Governor signing it are much longer, and the political considerations are extremely complex.

Paul H. Holmes