Dan Walters

By Dan Walters
Published: Tuesday, Jan. 10, 2012 – 12:00 am | Page 3A

Gov. Jerry Brown’s new budget says that the state’s shaky finances are “exacerbated by an unprecedented level of debts, deferrals and budgetary obligations,” which he describes as “a wall of debt.”

However, California’s debt, much of it run up over the last decade, is more like a mountain, at least a Mount Whitney and perhaps a Mount Everest.

Brown’s budget cites the $33 billion in on- and off-the-books debt run up in recent years to cover the state’s operational shortfalls – notwithstanding various constitutional prohibitions on deficit spending. It also cites constitutional obligations to restore school financing and mounting payments for the state’s formal bonded indebtedness that will double to $6 billion a year by 2014.

But those numbers, as large as they may appear, are only the foothills of the debt mountain that state and local governments have amassed in recent years.

Take, for example, those formal bonds.

California voters have approved nearly $130 billion in active general obligation bonds, of which $73 billion are still outstanding and $33 billion remain unissued, according to the state treasurer’s office, and even if no more are sold, it will cost the state nearly $135 billion to repay them over the next 30 years.

Other bond issues that lack dedicated revenues and therefore must be repaid from the state treasury will cost another $20 billion.

Local redevelopment agencies may have been abolished, but they’ve run up more than $100 billion in debt that must be repaid, mostly from property taxes that otherwise would finance local services. With interest, it may be $200 billion. And local governments and school districts have many billions more in non-redevelopment debt.

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