CHICAGO -- Both chambers of the Michigan Legislature passed a bill last week that authorizes the state to issue $1 billion of bonds to finance rebuilding the state's infrastructure.
The measure, which includes a $5 billion infrastructure program proposed by Gov. John Engler, is expected to be signed into law by Engler within the next two weeks, a spokesman for the governor said.
However, the governor is not expected to use any of the bonding authorization because the state cannot spend the money fast enough, said John Truscott, his spokesman.
The legislation incorporates the Build Michigan program, which was unveiled by Engler in February. That program calls for spending $5 billion over a 10-year period to rebuild highways and bridges, and included $260 million of revenue bonds backed by gas taxes and user fees. The bonds were sold in July.
The governor's plan also calls for the use of federal matching funds and state money.
The legislation passed last week would accelerate the governor's program by allowing the state to issue immediately an additional $1 billion of revenue bonds to take advantage of low interest rates.
Truscott said that while the governor is pleased his Build Michigan program was passed, Engler has no intention of issuing more bonds for the program.
"We can't engineer projects fast enough. Our engineers, architects, and planners are working around the clock to spend the bond money we already have," Truscott explained.
Nick Khouri, the state's chief deputy treasurer, noted that the legislation only sets a level of bonding authority, which is set to expire at the end of fiscal 1997 on Sept. 30, and does not mandate issuance of the bonds.
He added that the state Transportation Commission, which is appointed by the governor, already has the ability to issue debt for transportation needs without approval of the Legislature.
"We do not expect to issue more debt for transportation over the next three years," Khouri said.
House Democrats, who proposed the bonding plan last month as part of a $2 billion bond-financed Economic Reinvestment Strategy, argued that the additional transportation bonds would create more jobs in the state.
"This is the governor's opportunity to join with the Legislature in creating at least 50,000 new jobs in construction, spin-off businesses, and increased private sector investments," state Rep. David Holister, D-Lansing, said in a press release.
The Democrat's plan calls for backing the $1 billion of bond infrastructure projects mainly with $1.2 billion of federal funds the state is slated to receive over the next six years under the new federal transportation act.
The other part of the $2 billion program proposed by Democratic state lawmakers in the House has not been passed yet. This measure calls for the issuance of $500 million of general obligation bonds for maintenance projects at state universities and community colleges. Another $500 million of GO bonds would be sold to finance the construction of new facilities and develop technologies in the areas of telecommunications networks, solid waste and recycling, and improved sewer, water, and drainage systems.
Dave Forsberg, a spokesman for the House Democrats, said legislation is still pending in the House, which has adjourned until Nov. 5.