A board headed by State Treasurer Bill Lockyer voted unanimously Wednesday to freeze $3.8 billion in state financing for more than 2,000 road, levee, school and housing construction projects throughout California until the state budget is balanced.

Projects on hold include carpool lanes for the I-405 and I-5 freeways, $373 million in repairs and expansion for Southern California schools, and a variety of affordable housing projects around the region.

The Pooled Money Investment Board, comprised of Lockyer, state Controller John Chiang and Gov. Arnold Schwarzenegger's finance director, said it took the action to preserve cash. The board is in charge of managing and directing state money temporarily available for investment.

"You can't spend money that you don't have," Lockyer said, according to media reports.

Legislators meeting in special session have been unable to agree on a plan to close a $40 billion budget deficit, and the state could run out of cash as early as February unless it cuts expenses or raises revenue. The impasse has made potential investors leery about buying the state's bonds to fund infrastructure projects approved by voters over the past two years.

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