Quote:
Originally Posted by peanut gallery
I'm a little nervous the funding is coming from the state. Hope it materializes.
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His quote says the money is bond proceeds. Bond money can only be spent in accordance with the bond indenture. That is, if they are (just as an example
) high speed rail bonds, the money can only be used for high speed rail as defined by the documents with the bonds. So I assume this money is coming from highway or other bonds for a specific purpose and the state can't divert the money to fix its general fund problems.
Incidentally, the main impact the state's budget issues would have on infrastructure bonds if they are revenue bonds with defined revenue stream is that, due to the rating agencies pretty much trashing all CA bonds, the interest would be higher than it would have been and also it's possible the demand could be less (though, in fact, I keep reading the smart money understands that CA's constitution gives debt service second priority after school funding for whatever income the state gets and, by one analysis, the state has $54 billion available to cover about $6.5 billion of annual debt service--that is, $54 billion not pledged to school funding K through university).