Capitol Alert

Replacing those aging state office buildings will have to go on California’s credit card

Gov. Jerry Brown has been vocal about his preference for pay-as-you-go instead of borrowing when it comes to funding public works projects.

“We got to belly up to the bar and start spending money,” Brown told reporters in February.

A budget bill forwarded last week at the Capitol, though, pulls back significantly from current plans to set aside $1.3 billion to help pay for new state office buildings in downtown Sacramento.

Instead, this week’s plan gives the state the authority to borrow to construct two state office buildings – a new state resources building at Eighth and P streets and another new office building at 12th and O streets. State officials have said the current resources building at 1416 Ninth St. is the most dilapidated and unsafe of 29 state-owned or state-operated office structures in the Sacramento area.

Officials also have talked of rebuilding or renovating the Capitol annex, which houses the governor’s suite and much of the Legislature.

The move will help the state free up much-needed cash.

State revenue through June is running about $1.3 billion below what lawmakers and Brown’s office expected last June when they approved the current budget. Administration officials also have warned of dire fiscal consequences for the state if congressional Republicans succeed in rolling back the Affordable Care Act. The last recession ended nearly eight years ago, and Brown has warned that a future downturn is inevitable.

“While our preference is a pay-as-you-go approach, lease revenue financing has been an often-used and appropriate funding source for capital projects such as state office buildings,” Department of Finance spokesman H.D. Palmer said. An estimated $120 million would be left in the projects fund under the budget bill, which must be approved by June 15.