On a cloudy November morning in 2006, Gov. Arnold Schwarzenegger stood in a park-and-ride commuter lot in Prunedale and predicted sunny days ahead.

If voters would only approve a mammoth package of bonds on the ballot a few days hence, he said, the resulting public works projects would create a financial bonanza for California.

"If all of those bonds get approved," he said, "that could mean potentially 700,000 or 750,000 new jobs … we are talking about a really great addition to make our economy continue booming."

Voters did approve the $42.7 billion in bonds two years ago – and the governor's hyperbole may yet prove to be at least partially prophetic.

California is hardly booming: Statewide unemployment has grown to 7.7 percent from 4.6 percent when Schwarzenegger was exhorting voters; monthly new housing starts have dropped from 10,336 to 4,364; the Dow Jones industrial average slipped from just above 12,000 to below 9,000.

But state officials, economists, construction industry groups and union leaders say money from the bonds has begun to trickle out of Sacramento and into projects around the state, and is the one bright spot in an otherwise gloomy economic climate.

"We're just now starting to see some of those bonds hit the street," said Tom Holsman, chief executive officer of the Association of General Contractors of California. "The first quarter of '09 and going forward, there will be additional funds.

"So the bottom line is, yeah, that probably is the only ray of hope and optimism the construction industry is enjoying right now."

Only slightly more than half of the 2006 bond package has been committed to specific projects so far, and much less has been transformed into actual contracts.

Moreover, the state Treasurer's Office says only about $3.3 billion of the bonds actually have been sold.

But in an economy where a lack of bad news is seen as good news, even the prospect of public works funding is bringing faint smiles to those who make a living from building things.

"It's a bright spot, definitely," said Bob Rivinius, president of the California Building Industry Association. "While we haven't seen bricks and mortar going up, the money is starting to get out there, and that's encouraging."

The bond-financed projects include building roads, shoring up levees and improving water supplies.

They promise to provide "sweat equity" houses to low-income families in Delano, patch potholes in Sacramento streets and erect environmentally friendly classrooms in Eureka.

And create jobs. Depending on whose formula you favor, it's reckoned that each $1 billion in public works funds creates from 22,000 to 26,000 jobs – from construction workers to companies that make, sell and transport construction materials.

"In general, it's already been a big plus for us," said Steve Hiatt, who heads up the 80-employee Sacramento office of Nolte & Associates, an engineering firm.

Hiatt said the firm has worked on several projects funded by Proposition 1B, the $19.9 billion transportation bond measure, including the construction of high-occupancy vehicle lanes on Interstate 80 near Fairfield.

Diane Meehan, president and owner of Richard A. Heaps Electrical Contractors Inc., said her Sacramento firm, which installs electrical systems such as stoplights and traffic signals, also has benefitted from the gradually blooming public works spending.

"In our industry," she said, "it's much needed and overdue, and the more they can get in the pipeline, the better."

Economists point out that it's textbook government strategy to use public works projects to buoy a sagging economy.

"This is classic fiscal policy, the idea that the state spends more when people are spending less," said Chris Thornberg, a principal at Beacon Economics, a Los Angeles consulting firm. "It makes a ton of sense. … The trouble is, can they do it fast enough? You want them to do it fast, but you don't want to just start awarding projects in a willy-nilly fashion."

Call Steve Wiegand, Bee Capitol Bureau, (916) 321-1076.