$500M in Local Freeway Projects in Jeopardy

With less than a month left until the plug is pulled on half a billion dollars worth of local transportation projects, San Diego's regional government planning agency has approved a temporary bailout plan.

On Friday, directors of the San Diego Association of Governments (SanDAG) voted to seek approval from state and federal agencies to use countywide transit taxes and other local funds to keep the projects going for at least five months, perhaps longer.

That's because the long-running budget impasse between the Democrat-controlled Legislature and Governor Schwarzenegger has frozen California out of the bond markets, unable to tap funding for $500 million worth of voter-approved transportation, education, infrastructure and housing programs.

As for operational needs and ongoing projects, "the state is running out of money, and when they can't pay the contractors, we're in real trouble," said Renee Wasmund, SanDAG's finance director, in an interview.

"We're hoping the state is going to take action (on SanDAG's interim funding plan) the first week of February, and that the Feds will take action soon after."

Based on support expressed by state and federal staff officials in preliminary talks, Wasmund says she's optimistic about securing approval from decision-makers with the agencies that must sign off.

The plan calls for the emergency local funding to be replaced by state bond proceeds, once a state budget agreement is reached and California is able to access Wall Street's credit markets.

"Sacramento's got to get their act together," said Encinitas City Councilman Jerome Stocks, who represents his city on SanDAG's board of directors.

He termed the budget deadlock "partisan politics at its worst. We need somebody to jump the gap. Let's make a deal and serve the people of California."

The highest-profile local freeway improvement project that faces shutdown is the construction of "managed lanes", also known as "zipper lanes", along a 20-mile stretch of Interstate 15 in the North County -- which has a pricetag of $290 million.

Stocks says it would cost the region $18 million to shut down all the ongoing transportation projects countywide, and upwards of $2 million a month to maintain the infrastructures.

He said thousands of jobs are at stake, from engineers to architects and roadbuilders -- which, if lost, would create a "tail-wake effect" on the local economy.

"These people spend money at the bakeries, the groceries, the delis, the car repair and the dry cleaners," Stocks noted. "So those businesses will suffer … this is a terrible, terrible situation."

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