Four months after making a sweeping proposal to re-orient the state's infrastructure investments around "smart growth" principles, State Treasurer Phil Angelides — a former "New Urbanist" developer -— is moving forward with at least three different proposals to change the selection criteria in state bond and tax credit financing programs. "It's a new way of thinking for the state and the public finance community," Angelides said. "But it's not irresponsible and it is creditworthy." Angelides has already changed the criteria for doling out the state's low-income housing tax credits, and he contended that the smart growth criteria he has added is now playing an important role in determining which low-income housing projects receive the tax credits. He is moving forward with similar changes in the state's mortgage revenue bonds for both single-family and multi-family projects, which are administered by the California Debt Limit Advisory Committee. Finally, Angelides has proposed a dramatic shift in the proposed criteria for doling out $475 million in funds newly allocated to the state infrastructure bank to reflect smart growth principles as well as traditional job creation priorities. The bank's oversight committee — which is controlled by Gov. Gray Davis, not by Angelides — is scheduled to consider the Angelides changes at a meeting in October. Angelides also said he hopes to propose legislation next year that will embed smart growth principles in the state's five-year Capital Outlay Program, mandated under a bill passed this year by the Legislature. "Smart growth" is defined by its advocates as a series of policies that encourages new development in existing communities, preservation of farmland and other open space, and the creation of more transit- and pedestrian-friendly neighborhoods and business districts. Not surprisingly, smart growth activists in the state are enthusiastic about Angelides' initiative. The state treasurer began his smart growth push in June, with the release of a proposed "smart investments" strategy in his office's annual debt affordability report. Angelides, a veteran Democratic Party activist, said he wants to seize on political leaders' and voters' recognition that the state needs to invest more money in infrastructure. "I give the Chamber of Commerce and the California Business Roundtable credit for raising the issue," he said. "But there was a hole in the discussion. I began to think that it wasn't just about how much money. It's about how we want to grow." Before winning election last year, Angelides was best-known as the developer of Laguna West in suburban Sacramento — the first New Urbanist development actually built on the West Coast. His June report represented a radical departure from the approach of past state treasurers. In releasing the legally mandated "debt affordability report" — a sober recitation of the state's current bonding capacity — Angelides retitled the report "Smart Investments" and added a high-profile section calling for a dramatic shift in the state's approach to public infrastructure investment. Among other things, he said state investments should move beyond "‘magic' budget percentages and project laundry lists [so that] investments support livable communities, sustainable development, and sound environmental practices." "Smart Investments" was short on specifics, but Angelides quickly began to use his powers as treasurer — most of which were created during the '70s and '80s while former Assembly Speaker Jesse Unruh's was treasurer — to move the idea forward. Angelides first revised the criteria used by the California Tax Credit Allocation Committee to select recipients for low-income housing tax credits. The competition for tax credits is highly competitive, with four applications for every project selected. Angelides' predecessor, Matt Fong, selected the winners by lottery. Angelides replaced that system with a lengthy set of criteria in which project density, linkages with mass transit, and child-care programs are taken into account. He claims that the winners — which were announced in late September — included many projects that scored high on these "sustainability" criteria. He is now moving forward to embed smart growth principles in the selection criteria for a variety of state loan programs administered by the California Debt Limit Allocation Committee, especially housing mortgage revenue bonds. But Angelides biggest immediate challenge appears to be to win over the governor's staff in order to incorporate smart growth principles into the funding criteria for the state infrastructure bank. Established several years ago, the bank never received any state appropriations until the 1998-99 fiscal year, when it got $50 million. In the ‘99-2000 budget, however, Gov. Gray Davis and the Legislature gave the bank an additional $425 million — thus increasing the significance of its selection criteria. The bank was created partly to give a financial incentive to local governments to follow the state's own growth management priorities. However, when the criteria were first drafted in April — mostly by staff holdovers from the Wilson Administration — they reflected conventional economic development and public finance priorities. The most important criteria were job creation, leveraging of private funds, and whether the project was ready to proceed. Angelides, however, has proposed a dramatic revision in which environmental protection, land use, and efficient use of infrastructure would be the most significant measurement. Job creation and leveraging would be only half as important as under the staff proposal, while readiness would have no significance at all. (See chart.) It is hard to say whether Davis — who is always cautious and often mysterious — will embrace the Angelides proposal. The treasurer said he has "spoken briefly" to the governor. Smart growth advocate Steve Sanders of the California Futures Network said he has met with Finance Director Tim Gage and Trade & Commerce Secretary Lon Hatamiya to promote the infrastructure bank revisions and received positive feedback. Angelides has also pitched his "smart growth" ideas to Davis's infrastructure commission, which is co-chaired by Lt. Gov. Cruz Bustamante and Business, Transportation, and Housing Secretary Maria Contreras-Sweet. However, in its interim report, issued in August, the infrastructure commission did not specifically embrace "smart growth" principles. Indeed, in its proposed recommendations for bond criteria, the infrastructure commission proposed placing priority on need, impact on public health and safety, economic impact, and — the only item linked to Angelides agenda — impact on quality of life. The infrastructure commission's transportation subcommittee called for investment in multi-modal transportation systems and a high-speed rail network but did not specifically call out "smart growth" ideas. Two other parts of Angelides' proposal will have to wait until next year. The first is his idea to have the state's Capital Outlay Program support infrastructure projects only if they have been vetted through a regional planning process. Angelides has been discussing this topic with, among others, Assemblyman Tom Torlakson, D-Antioch, one of the Legislature's leading advocates of local governance reform. The second is a proposed ballot initiative that would eliminate the two-thirds voter approval requirement for local general obligation bond issues and allow for simple majority voter approval. Angelides has committed himself to raising $5 million in campaign funds for that initiative.