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Construction group warns late budget puts ‘hundreds of projects’ at risk of shut down

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A construction-industry coalition is warning that without passage of a state budget “in the next few days” or other emergency actions, hundreds of projects across the state affecting up to 60,000 jobs could be halted, according to a letter sent to Gov. Arnold Schwarzenegger and top lawmakers Wednesday.

Contractors are at risk of going unpaid Nov. 1 for the work they are currently performing, the letter said. The coalition requested an emergency appropriation, if there is not quick passage of a spending plan, to ensure that funds flow “to keep $9.5 billion in ongoing transportation projects from shutting down.”

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“Some are suggesting that contractors can keep these jobs afloat by continuing work without pay until the budget gets resolved. We must emphasize in the strongest terms possible that the vast majority of contractors are in no financial condition to float CalTrans a loan,” wrote Jim Earp, executive director of the California Alliance for Jobs, and other members of the construction coalition.

“The cost of making late payment penalties or, worse yet, shutting down projects and starting them back up again are enormous and totally unnecessary,” the letter said.

Schwarzenegger and top lawmakers announced last Thursday that they had reached the “framework” of a budget agreement, but progress in negotiations has since stalled. The 2010-11 budget is the latest in modern state history.

-- Shane Goldmacher in Sacramento

twitter.com/ShaneGoldmacher

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