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Angelides - 'Smart Investments' and Smart Politics

By Peter Schrag, The Sacramento Bee (Published June 30, 1999)

The last thing you'd expect in a report from the state treasurer -- any state treasurer -- is anything that resembles what President Bush used to describe as "the vision thing."

But California Treasurer Phil Angelides' call for a state investment plan that's more than a laundry list of needs and that addresses, among other things, the growing danger that this state will become "two Californias" -- one rich, one poor -- is probably the closest to vision that any California statewide official has come since Gov. Pat Brown left office back in 1966.

Angelides, a Sacramento developer who's been a player in state and national politics for years, will never convince anyone that he doesn't have his eye on higher office. Indeed, in thrusting himself into broad planning issues that lie beyond the conventional mandate of the treasurer, he's moving directly into areas that, as he notes, have been missing from the state's politics for a generation.

"I can take a narrow view of my role," Angelides remarked the other day, but clearly that isn't what he intends to do. He might also have said, though he did not, that he's raising issues that Gray Davis, California's risk-aversive, poll-driven governor, has studiously avoided.

One hesitates to call them fellow Democrats because they are so different. Not that Angelides wears any stridently liberal colors. His new proposal flies the flag of efficiency and comes in the form of an expansion of California's Debt Affordability Report, a regular estimate of the state's bond capacity that ordinarily has about as much general interest as a crop report from the Department of Agriculture.

But in the report, which he calls "Smart Investments," and in an intense round of talks around the state last week, Angelides is urging the governor and Legislature to consider matters that touch on the very essence of California's future.

Among them: the failure to establish real priorities for the tens of billions of dollars the state needs to spend on infrastructure; the unplanned social, environmental and financial inefficiency of much of the state's ongoing development; the lack of local control and accountability in the state's fiscal arrangements; the state's woeful lack of affordable housing; and the cost of the growing gap between rich and poor.

Angelides, who, as treasurer, exercises great influence in the investment of the state's huge pension funds, makes clear that he has a fiduciary responsibility to protect those funds. But he also points to the contrast between the high-risk investments that have been made in emerging economies overseas and the relatively few dollars that have been directed to economic development in our own inner cities and other declining communities. Along with the duty to protect and nurture those funds, he said, there is an obligation to put them where they "produce wealth and goods for society."

Although he declares -- correctly -- that "decades of underinvestment have worn thin our public fabric," and although he estimates that in the next 20 years California will add 5 million new jobs, 12 million residents and more than 2 million schoolchildren, he's not talking about copying the go-go investments of California's postwar boom. This time around it has to be done in the context of scarce resources and radically changed economic assumptions to promote efficient use of water and other resources; to reduce demand for new freeway construction; and to generate alternatives -- more drug treatment, youth employment programs -- to ever-escalating prison costs.

Angelides is an apostle of what's sometimes called the New Urbanism -- communities in which housing is planned in close proximity to urban centers, jobs and civic amenities. And while his own most notable development, Laguna West, south of Sacramento, sits on the urban fringe, it was designed with those principles in mind.

As treasurer, he's following up on that by supporting a change in the allocation of millions of dollars of moderate-income housing tax credits and local infrastructure financing. Where his predecessor, Matt Fong, did it with a lottery, presumably to make sure there would be no charges of favoritism, it will now be done on the basis of priorities that include community need and proximity to public transit and schools.

At the same time, Angelides also urges real regional planning, as well as restoration of fiscal control to local communities, thereby reducing their dependency on the state. On that list, perhaps the toughest hurdle of all is his proposal to allow all local agencies the power to issue bonds for new infrastructure with a majority vote of the people, rather than the two-thirds vote that's been required for generations. So far, voters have been loath to accept such a change even for school bonds.

Angelides himself ducks some tough issues, most notably the relationship between high levels of immigration and the large number of low-income Californians who have only limited schooling. When he was asked about it the other day after his talk at San Francisco's Commonwealth Club, he simply avoided it.

And while his declaration about the importance of "intelligent investment of public resources in a manner that supports environmentally respectful, well-planned growth and promotes equality of opportunity" is indisputable, he avoided a question -- also raised at the San Francisco meeting -- about restraining both immigration and growth. How can the state achieve Angelides' objectives without addressing such critical issues?

And yet until the matters he is raising become part of the larger political debate, we will never get a serious discussion about any of the huge questions California faces. Almost certainly Angelides wants to run for higher office. If he can do it putting his questions into play, more power to him.

PETER SCHRAG's column appears in The Bee on Wednesday. He can be reached by fax at 321-1996; or by letter at Box 15779, Sacramento, CA, 95852-0779. Find previous columns here., 1999)

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