Crises may halt CA infrastructure projects

Steve Hawley, Jan 07, 09.

Infrastructure projects in California may be delayed or halted entirely as a result of the state’s concurrent budget and credit crises, according to an article in the Los Angeles Times. The state faces a budget shortfall of $42 billion by 2010 and is unable to sell most of its bonds, and as a result officials are preparing to shut down financing on roughly 2,000 infrastructure projects. The state treasurer told legislators last week that the shutdown would cause a ripple effect, ultimately costing private companies $12.5 billion and eliminating 200,000 jobs. The effects could be even more widespread, as President-elect Obama and many economists believe that infrastructure spending is one of the best ways to help the economy - an option that California might not have.