Current CA Spending

The Governor’s 2006 California Five-Year Infrastructure Plan proposes state-appropriated funding of $64.2 billion with an additional $25.5 billion provided by sources outside of the state treasury over the next five years. It is important to keep in mind that this Five-Year Plan is merely a framework with which policy makers can develop further infrastructure financing recommendations – it is not an actual budget for the state of California.

Programmatically, this plan consists of:	By fund source, the plan consists of:

The 2006 Five-Year Infrastructure Plan reflects the infrastructure needs of state programs and recommends funding priorities based on considerations of urgency, equity, and funding availability. It proposes a balanced and affordable investment in California’s future.  This Plan is part of a foundation upon which a much larger vision of California’s infrastructure has been built. That larger vision is the Governor’s ten-year Strategic Growth Plan for rebuilding California.

California currently spends about as much as the rest of the country on infrastructure projects, but less on transportation infrastructure and more on water and resources than other states. When comparing California (at a current level of 3% of Gross State Product) on an international level, our state lines up favorably with many European Union nations. However, many countries in Asia are by far exceeding this level of infrastructure investment, with Japan around 5% in 2004 and countries like India and China with levels even higher.

Private Financing Options

Today’s businesses, including industries ranging from agriculture to technology, recognize that it is in their best interest to invest in California’s infrastructure. Much of California’s infrastructure, such as housing, telecommunications, and energy, is built and financed by the private sector. It is often the source of innovative solutions and best practices. The private sector often provides statewide and regional leadership required to initiate change in public policy and widespread application of new techniques and technologies. Ensuring sustainability, quality of life, and continued economic growth for California creates a healthy environment for a growing business and its employees. An investment in California’s infrastructure is an investment in economic prosperity.

As the public sector continues to seek alternative means to fund the development and rebuilding of essential infrastructure and services, it has increasingly turned to innovative project finance and hybrid public and private debt financing models. Capital-intensive infrastructure assets like toll roads and airports, which have traditionally been controlled by governments are an emerging asset class for global investors. Toll roads, hospitals and other networks or structures that provide support to society – traditionally overlooked in real-estate portfolios – increasingly are being sourced by investors seeking stable cash flow and higher returns.