Even as President-elect Barack Obama was preparing a giant financial aid package meant to provide green jobs and steer the nation toward a sustainable economy, a sledgehammer blow paralyzed a healthy sector of the growing green economy in California.
It happened on December 18, 2008. The State of California was in an unprecedented financial crisis, no longer able to borrow, which it does routinely to smooth out cash flow. The Legislature was in the sixth month of an impasse, unable to adopt a budget that would cover obligations. The Legislative Analyst predicted that the State would run out of cash in February unless the stalemate was resolved. Voter-approved bonds were not selling.
Faced with this unprecedented emergency, the Pooled Money Investment Board, which consists of the State director of finance, controller, and treasurer, decided to put an immediate stop to all spending of voter-approved bond funds--a total of over $3.8 billion committed to some 2,000 projects statewide. These were projects to improve schools, transportation, and environmental infrastructures. Agencies receiving bond money were notified that no invoices would be paid for work done after December 18.
Abruptly, millions of dollars’ worth of “green” work was suspended, indefinitely. Many of the projects stopped along the coast and in the nine San Francisco Bay counties were funded by Coastal Conservancy grants to local governments and nonprofit organizations.
These funds had created jobs in local communities for restoring wetlands, streams, and wildlife habitat, protecting coastal farming and fisheries, improving water quality in streams and nearshore waters, reducing flood hazards and carbon emissions, building trails, and encouraging commuting by bicycle rather than by automobile. The funds also supported the purchase of scenic lands for public enjoyment, restoration of historic buildings for public use, and many other projects that were stimulating green economic benefits.
Among those idled were engineers, construction workers, equipment suppliers, hydrologists, and wildlife biologists. The ripple effects of the freeze jolted businesses already struggling in the national financial meltdown and jeopardized the survival of small nonprofit groups. The effects were felt with special intensity along the North Coast and in other areas with abundant natural resources but high unemployment.
When the stop-work order arrived at the Coastal Conservancy on December 18, the holiday party was about to start. It was immediately canceled and project managers spent the afternoon conveying the bad news to more than 200 contractors and grantees, to whom the Conservancy had committed $143 million for projects under contract and owed $11 million more for completed projects. Invoices that had been signed and approved by December 18 would be paid first, while payment for others would have to wait indefinitely. More than 90 percent of the Conservancy’s projects are bond-funded.