State Economy at a Crossroads

By Paul T. Rosynsky, STAFF WRITER

OAKLAND — Almost half the goods made in Asia and sold in the United States, from television to T-shirts, pass through California.

Their movement accounts for one out of seven jobs in the state and contributes billions of dollars to the state’s economy.

And, thanks to free-trade agreements and rapidly expanding Asian production markets, the goods coming from China and other countries are expected to more than double in the next 15 years.

That is the good news.

The bad news is that California’s infrastructure, from ports to highways, will not be able to handle the increased trade unless hundreds of billions of dollars are spent building new roads, expanding ports and increasing the number of rail tracks laid throughout the state.

Without the investment, leaders of the state’s transportation industry said, California will begin to lose the business it once took for granted.

“The strains are being felt right now,” Port of Oakland Executive Director Jerry Bridges said. “Other ports and areas are not sitting still, and this competition for Pacific gateway cargo will hurt California if nothing is done.”

The state Senate Committee on Transportation and Housing took aim at the problem Tuesday during an informational hearing at the Elihu Harris State Building.

Its purpose was to shed light on a growing problem and to begin to search for ways to improve what was once California’s pride.

Confronted with congested highways, cargo backups and crumbling roadways, state leaders are now realizing that years of deferred maintenance and improvements to its transportation network have begun to take a toll.

Gov. Arnold Schwarzenegger has made transportation funding the new focus of his administration, proposing this week that the state borrow billions to improve California’s network of roads, rails and ports. And before the hearing Tuesday, state Senate President Don Perata, D-Oakland, heralded his own idea on how to spend $10 billion expanding ports, building highways and strengthening levees.

Every year, the state loses $22 billion in lost productivity due to congested freeways, said Sen. Tom Torlakson, D-Antioch.

Shipping companies concerned with cargo backups at Southern California ports have begun to look at alternative gateways in Washington, Canada and Mexico.

While all agree there is a problem and money is needed to solve it, there is no consensus on how to raise those dollars and what to fix first.

Some want user fees placed on certain segments of the transportation industry to help pay the costs for building truck- only lanes and new rails.

Others want a dedicated revenue stream devoted to improving ports and highways.

Perata’s bill, which has been on the Senate floor since February, calls for investments in a wide array of transportation projects.

It calls for $2.5 billion to be spent on ports, $1.5 billion on projects already picked for funding, $2.3 billion to replace gas tax revenues used in the past to balance the state budget, $2 billion to improve the network leading to and from ports, and $2.5 billion for security enhancements, among other items.

Meanwhile, Schwarzenegger has talked about borrowing even more to solve the problem, though he has yet to pinpoint where that money would go.

“The emphasis on a systematic approach is important, we should not be thinking of this as separate entities,” Lowenthal said.

“It is not realistic to expect that one city or one region bear the financial responsibility,” Perata added.

And everyone agrees, it can only be solved if Democrats and Republicans put aside differences.

“More than ever before in California’s history we have been in a year of confrontation,” Lowenthal said. “That is now over.”