In one of the most closely watched contests in the U.S., California voters overwhelmingly approved March 2 two linked ballot measures that Gov. Arnold Schwarzenegger (R) promoted as essential to the state’s fiscal recovery. Many industry observers call the measures vital to stopping further hemorrhaging from transportation and other infrastructure investment. The California Transportation Commission estimates that $2 billion in transportation projects could be sitting on the shelf by June.

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Proposition 57, which authorizes a $15-billion bond issue to close a gap in this year’s state budget, passed with 63% of the vote. A related measure requiring a balanced budget and a budget reserve won with 71%. Voters decisively rejected a proposition that would have allowed the legislature to raise taxes and pass a budget with a 55% vote, rather than the current two-third majority. Critics warned that the measure could stifle economic growth by making tax hikes easier.

Overshadowed by the historic debate on the state’s financial future, a $12.3-billion school and college construction bond issue nevertheless appears to have eked out a narrow victory. Unofficial totals show Proposition 55 ahead by about 57,000 votes, about 1% out of nearly 5.6 million cast statewide. The presence of the $15-billion bond issue on the ballot, and concerns about the state’s fiscal health, were expected to make for a close vote in a state that routinely passes school construction bonds by wide margins.

Election day was also busy for county and municipal voters. As the statewide school bond measure went down to the wire, Los Angeles voters overwhelmingly approved one of the largest local bond measures in state history, a $3.87-billion school construction and modernization bond issue. More than 70 school construction and expansion projects in Los Angeles are complete or in progress, and over 100 more are in the works.

Voters in seven San Francisco Bay-area counties approved a $1 hike in bridge tolls that will raise about $125 million annually. Toll revenue will help fund a $634-million rail extension to Warm Springs in Alameda county, a $150-million to $400-million fourth bore in the Caldecott Tunnel between Alameda and Contra Costa counties, and the seismic upgrade of the Transbay Tube linking San Francisco to the East Bay

Several major cities also voted on modifying contracting procedures. By a margin of 54% to 46%, San Jose passed a closely watched initiative that will make the city one of the first in California to permit design-build for public works projects.

Leading the "too-close-to-call" category is San Diego’s proposal to give city agencies the option of construction management at-risk procurement. With all precincts reporting, the measure leads by just 284 votes out of nearly 182,000. Backers say giving public agencies the CM-at-risk option would control costs, speed project delivery, and expand opportunity for minority, women, and emerging contractors. Critics charge that it would circumvent the state contracting code, promote cronyism, and hurt local contractors.