California road, school construction projects could be halted or delayedThe government agencies that I'm aware of are spending money as fast as they can before another freeze is implemented. Meanwhile, hope for a federal bailout is the only plan. Stay tuned.
Road, levee, school and housing construction projects throughout California are on the verge of being halted or delayed, as state officials prepare to shut off their financing in the most drastic fallout yet from California's cash crisis.
Officials plan to meet today to freeze financing on these projects and about 2,000 others, including park improvements, environmental restoration and repairs to state prisons...
Many of the projects were authorized by voters in 2006 and championed by Gov. Arnold Schwarzenegger in his reelection campaign that year.
All rely on funds that are nearly depleted because the state has been unable to sell the routine bonds it uses to keep cash flowing. Last month, the state failed to sell two-thirds of bonds worth $500 million, according to state Treasurer Bill Lockyer.
Lockyer told legislators last week that halting public-works projects would have a ripple effect through California's economy, costing private companies $12.5 billion and eliminating 200,000 jobs.
The cost of shutting down a project in midstream is enormous, said Jim Earp, executive director of the California Alliance for Jobs, a construction industry-backed nonprofit group that advocates for public-works spending.
"It gives the contractor cause to file suit for damages," he said. "It is incredibly disruptive. It can cause major safety problems. We are going to be putting thousands of people out of work."