Chicago - House Democrats in the Michigan Legislature introduced a plan this week to issue $1.7 billion of general obligation and revenue bonds to rebuild the state's transportation system, repair college facilities, and initiate other projects.

House Speaker Lewis Dodak, D-Birch Run, said in a press release, "The House Democratic Economic Reinvestment Strategy will do three things - create jobs now, rebuild our decaying infrastructure, and improve the skills of both workers and young people. "

"Our plan will put people back to work immediately, while we retrain Michigan workers for good jobs in the future," he explained.

The plan calls for the issuance of $740 million of revenue bonds to rebuild the state's roads, bridges, airports, and rail lines; $500 million of GO bonds for maintenance projects at state universities; and $500 million of GO bonds to build new facilities and technologies in the areas of telecommunications networks, solid waste and recycling, and improved sewer, water, and drainage systems.

The proposed transportation bonds, which would be combined with $260 million of transportation debt the state issued in July, would be mainly backed by the $1.2 billion of federal funds the state is slated to receive over the next six years under the new federal transportation act, according to State Rep. Nick Ciaramitaro, D-Roseville, one of the plan's architects.

The Democrats also identified other sources of funding for both the revenue and GO bonds, including loan repayments from local governments, other federal revenues, increases in state gas tax revenues, and the dedication of some existing state revenues to the program.

Mr. Ciaramitaro said that legislation for the program has been introduced in the Legislature. He pointed out that the GO bond proposal requires a two-thirds vote of the Legislature to place the bonding plan before voters, probably on the November 1993 municipal election ballot. The Michigan Constitution requires voter approval of all GO bonding.

Legislation for the transportation bonds, on the other hand, only needs a majority vote of legislators and does not need voter approval, Mr. Ciaramitaro said.

He added that the GO bonding plan encompasses a bill introduced earlier this year in the Legislature by State Rep. Kirk Profit, D-Ypsilanti. Besides calling for $1 billion of new GO bonds, Mr. Profit's bill includes a provision to sell a percentage of the debt as zero coupon college saver bonds.

The Democrats said their plan, which includes a job-training program for students and adults, would create 100,000 new jobs in the state and reduce unemployment 25% by 1994. The state's unemployment rate stood at 9% as of August.

"We need to get a shot in the arm for the economy generated from direct job creation and building better infrastructure to attract industry," Mr. Ciaramitaro stated.

The Democrat's program faces a tough battle in the Republican-controlled Senate and with Republican Gov. John Engler.

Guy Gordon, a spokesman for Senate Majority Leader Dick Posthumus, R-Alto, said "borrowing to this extent is unwise and unnecessary."

John Truscott, a spokesman for Gov. Engler, called the Democrats' plan vague and politically motivated, adding that it "is not a serious thing." He pointed out that the governor's Build Michigan program was already "moving full-steam ahead" to repair the state's roadways and bridges.

In February, Gov. Engler unveiled a $5 billion, 10-year transportation program that included the issuance of $260 million of revenue bonds backed by gas taxes and user fees. Those bonds were sold in July.

Nick Khouri, the state chief deputy treasurer, questioned the large amount of bonding called for by the Democrats, saying that, "Michigan always takes a conservative approach to debt."

The state has about $400 million of outstanding GO debt, rated AA with a negative outlook by Standard & Poor's Corp., AA by Fitch Investors Service, and A1 by Moody's Investors Service.

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