Broadband missing on California's new enhanced infrastructure list

3 September 2014 by Steve Blum
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A deal to give local governments more infrastructure financing options finally came together in the closing hours of the California legislature’s 2014 session. Assuming Governor Brown signs senate bill 628 – likely, considering that his staff was deep in the negotiations that led to it – it’s good news overall for local governments. The measure gives local agencies the ability to create enhanced infrastructure financing districts that can issue bonds to build public facilities and earmark the future tax revenue the project is expected to generate to pay the money back. With the notable exception of tax money designated for schools.

The current version of IFDs – which would also remain an option – require three successive votes by the public, two of which have to pass by a two-thirds majority. This new version – enhanced, as they call it – only requires a single ballot measure with 55% approval. The EIFDs would also have more flexibility in putting financing packages together and cities, counties and other agencies could work together to form one.

A big hurdle in the bill is a requirement that local governments more or less wrap up the leftover business of former redevelopment agencies. Given the messy and litigious way those agencies were shut down by the legislature and the courts, it might be a while before many cities can take advantage of EIFDs.

The biggest disappointment from my point of view is that the list of allowable enhanced projects doesn’t specifically include broadband infrastructure, as was originally intended, at least by the governor’s staff. On the other hand, it isn’t prohibited either. Along with the long list of the types of projects that are specifically allowed, the bill leaves the door open for EIFDs to finance other sorts of “public capital facilities or other specified projects of communitywide significance that provide significant benefits to the EIFD or the surrounding community”.

So broadband projects are at least theoretically possible. It would have much better if the bill removed any doubt, since uncertainty and risk don’t play well with either elected officials or voters. But that’ll be a problem for next year.