California Crisis Deepens - Are Other States To Follow?

[deminks]

from yesterday, 2/2/09

http://biz.yahoo.com/cnbc/090202/28978169.html?.v=3

Today is the day Californians begin to personally feel the pain of the state's massive budget gap. As Gov. Arnold Schwarzenegger and top legislative leaders continue to meet behind closed doors to hammer out a plan covering the current $16 billion gap-projected to grow to $42 billion by June, 2010-the state controller is delaying $3.5 billion in payments to conserve cash.

A self-imposed deadline for coming up with a budget deal by this weekend came and went, with no word on how close all sides are. Democrats, who control the legislature, have proposed a package of massive cuts and massive tax hikes. Republicans, which have enough votes to torpedo any budget deal, will only agree to the tax hikes if there is a hard spending cap to prevent future crises. And the governor wants to make sure the resulting package has enough stimulus programs to spur jobs creation projects. This includes easing some environmental review requirements, which Democrats have balked at.

California is hardly alone. Wisconsin is facing its largest shortfall in history, $5.7 billion, and the Wisconsin State Journal says the state's rainy day fund only has enough cash to run operations a day and a half.

Kentucky lawmakers have been meeting for weeks to figure out how to close a budget gap nearing half a billion dollars. Arizona just cut a deal on handling its $2 billion deficit, the worst situation the state has been in since 1929. But Alabama, Florida, Rhode Island, and Utah all have budget gaps which equal more than 10 percent of their general fund.

And New York City, which nearly went famously bankrupt in the 1970s, now is struggling to close a $4 billion gap. That's $4 billion for New York City. Not the state.

(end snip)

The article says IOU's are being issued by California in lieu of payments. So, take that to your grocery and try to use it!

Furlough's and IOU's. Is it just me? I suspect that no one knows what they are doing. I also suspect that we will lose a lot of our environmental and social services here in the name of budget cuts, much like we lost our civil liberties in the name of so-called national security.

All the governors are all crying for the national stimulus package to pass. For good reason.

[BlooInBloo]

1. FL and NV are essentially broke also, I believe. Possibly others as well.

[lonestarnot]

4. add AZ to that list somewhere at the top. They are doing away with education here.

Not that pugs will miss it, if you know what I mean.

[Divine Discontent]

2. they said they're making 'great' strides with Arnie. We'll see. What a disaster. Hate to see what

will be slashed. Do they actually plan to cut disability payments for people??? I hope not, they will be out on the streets, hobbled, sick, etc. The revenue needs taxed to lavish entertainment (Disney, Six Flags), not small purchases like a movie ticket, and taxes need added to liquor, cigs, and sorry, but taxes need increased on wealthy people (250K plus) and corporations. They'll be plenty of cuts in recreation/parks I'm sure, and education, etc.. will be interesting to seek what they come up with!

[madrchsod]

3. republicans in california would rather kill the state than raise taxes

other states are trying every means possible to stay out of debt or at least a manageable debt load.

California created it`s own demise and so far unwilling to stop it.

[closeupready]

5. Raise taxes on the wealthiest, you idiots - not that complicated. Yes, that means you, Arnie.

No way around that.