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Other Budget Issues

Last Updated: 3/7/2012
Budget Issue: Public and private marina loan programs
Program: Department of Boating and Waterways
Finding or Recommendation: Eliminate the public and private marina loan programs operated by the Department of Boating and Waterways (DBW) and reduce Governor’s January budget request by $13.8 million from the Harbors and Watercraft Revolving Fund.
Further Detail

Background. The DBW funds, plans, and develops boating facilities on waterways (both public and private facilities), provides financial aid and training to local law enforcement, and licenses yacht and ship brokers. Other activities include a wave and ocean data program, weed eradication in the Delta, and beach erosion and replacement programs. The budget proposes $69 million in expenditures for 2012–13, mainly from boat registration fees, motor vehicle fuel tax revenue, principal and interest payments on previously issued loans, and federal funds.

LAO Recommendation. The Private Marina and Small Craft Harbor Loan programs typically make loans for the planning, design, and construction of public small craft harbors facilities and private recreational marina facilities. In 2012-13, proposed expenditures for these programs total $13.8 million from the Harbors and Watercraft Revolving Fund (HWRF). We recommend that the Legislature consider whether these loan programs continue to be a state funding priority. Eliminating these programs would leave the lending function to the private sector.

We note that the budgetary savings from the elimination of these programs would gradually decline over time because one of the primary sources of funding for these programs is the repayment of the interest and principal on previously issued loans.