California near "meltdown"

[Valdez]

No, not the Nuclear North Korea kind.

California's government risks a financial "meltdown" within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state's controller said on Wednesday.

Controller John Chiang, who has previously warned that California risks running out of cash without a budget deal, said revenues in May fell by $1.14 billon, or 17.7 percent, from a year earlier.

The revenues of the government of the most populous U.S. state fell short of estimates in Schwarzenegger's budget plan by $827 million, Chiang said.

"Without immediate solutions from the governor and legislature, we are less than 50 days away from a meltdown of state government," Chiang said in a statement.

"A truly balanced budget is the only responsible way out of the worst cash crisis since the Great Depression," Chiang said.

California's revenues have been on a dramatic slide as a result of recession, rising unemployment and its lengthy housing downturn.

The state's revenues from personal income taxes tumbled by 39.3 percent in May from a year earlier while revenues from corporate taxes fell by 52.1 percent and revenues from sales taxes sagged by 7.6 percent, according to a report released by Chiang's office.

Schwarzenegger, a Republican, has proposed filling the state's budget gap with deep spending cuts, borrowing from local governments and by scrapping some state programs, including its welfare program.

Democrats who control the legislature are crafting a rival budget plan that includes spending cuts and saves programs Schwarzenegger has proposed eliminating. They instead would use reserves estimated in Schwarzenegger's budget to narrow the state's shortfall.

State Senate President Pro Tem Darrell Steinberg said on Tuesday he wants a budget through the legislature by the end of this month.

California's new fiscal year begins on July 1. The sooner the state has a budget signed into law the better poised it will be to raise short-term funds to fund its operations through the sale of revenue anticipation notes on the municipal debt market.

http://news.yahoo.com/s/nm/20090610/pl_nm/us_economy_california_revenues_2

 

[ShinyFlareon]

It's our own stupid fault. We voted in the former-pot-smoking bodybuilding movie star as our governor. -_- this is such a messed-up state...

 

[Eredar Warlock]

Lesson for the rest of the country: Don't spend so much money on useless crap.

 

[Snake Bandage]

Way to go, Governator.

 

[Naya Rivera]

..It just gets worse...

 

[Falconwing]

Don't worry. I'm sure the Terminator will stop the economic bomb!

 

[Nicoleta01]

This was coming for a while now...Balanced budgets in good times helps prepare for bad times, that's for any government really. :/

 

[ii kanji]

Wooh! Go Schwarzy! xD

Schwarzenegger, a Republican, has proposed filling the state's budget gap with deep spending cuts, borrowing from local governments and by scrapping some state programs, including its welfare program.

Great to see you've got your priorities right.

I probably shouldn't laugh, I've got Boris after all

 

[Mitchman]

Stop wellfare? My god. The streets will be filled by tomorrow watch.

 

[Sea Goddess]

damn not good, when CA's economy suffers, it cant be god for the US as a whole

 

[TheArsenalRisen]

Oh dear. @_@;; Niiiice job thar, Governator.

 

[Sea Goddess]

Gary Coleman would never have let this happen. *shot*

 

[Maxim Posthumus]

Gary Coleman would never have let this happen. *shot*

Whatcha takin' 'bout?

I hardly see it's just California. The entire US is suffering from the recession. While the junk-producing companies in China are laughing at that.

By the way, Postal ftw! It was the game I first seen Coleman in. Coleman ftw!

 

[Netto Azure]

5 days later. :O

Anyways...this has started way back on the Regan years, with the massive tax cuts initiated that wreaked havoc on the tax base. Our senseless statute that 2/3 Majority is needed to pass a budget (Giving the Republicans virtual minority veto power) and one proposition that says 40% of the budget must be allocated to education.

Sometimes my states constituency is just messed up. Seriously it's like "We want our perfectly receptive welfare system, but don't raise our taxes."

@_@ It's just stupid. :O

 

[ferrari-kun187]

califrnia gets boring (except when I'm in LA) I wanted to live in Hawaii. Our economy sucks, now my school will have a week taken out.

 

[Pokemon Prince]

only in america do they allow celebrities to become governors...and look what happens.

 

[kaijin2k3]

California gets boring (except when I'm in LA) I wanted to live in Hawaii. Our economy sucks, now my school will have a week taken out.

I've always felt that way... though Hawaii wouldn't be much my thang, heh heh.

Anywhom, I'm not surprised. We've had so much useless construction on our streets it's been retarded. Our alleyway (I'm in an apartment) was completely cut off for a week because they were repaving... except there weren't any pot holes or even damage to the road, it was just lumpy. And it still is, even after their repaving.

And it's been the case so much around here with most of the road construction I've seen. I'm just glad I'll be moving out of this state soon, but I really do worry for my parents since my dad doesn't really have the most stable of jobs and I think they're kinda stuck here - if not financially, then definitely psychologically.

 

[bell02+]

This is more than the Governator's fault, honestly he's one of the few republicans I respect right now. He also is probably the most moderate republican as well. This has to do with the silly law system republicans (and democrats) have set up over competition over the years by passing laws that let things like Californians vote on everything, and requiring tax raises to need so many votes, and not requiring projects to use available money before they start.

I mean, I'll never blame a republican for being a "Republican" and I'll complain with everyone else with how much he's cutting back from education and programs that can choke out the state more than anything else, but it's not only his fault. Impeaching, recalling, or throwing him out of Office like Davis will not save anything.

I understand that no one wants to raise taxes in a recession, but if the money's got to come somewhere it's got to come somewhere and it might as well come from those that can afford it. Still I blame the rest of the Republicans in the party for being jack-ass'd stubborn over anything, but then, the democrats, like them or not, have being doing nothing but playing the blame game as well. Leaving them to settle on only cutting programs to what has been repeatedly stated, will not pay for all of California's budget. So basically everyone is really just waiting things out until Obama saves them, while claiming to be self sufficient (which they are not); problem is, Obama may not step in until after the meltdown has occurred.

califrnia gets boring (except when I'm in LA) I wanted to live in Hawaii. Our economy sucks, now my school will have a week taken out.

Every place gets boring if you live there all the time, including Hawaii. Even the boring stuff that you do can be considered exciting by others. That's my experience anyways, so now I try not to take it for granted.

 

[Dark Chromium Dragonite]

This topic is a rollercoaster of hilarity.

Are you people really blaming a guy who's been in office for 6 years for problems Democrats have been making worse for 20? Or does the stat of "20% of the state budget feeds into retirement benefits for government workers" mean absolutely nothing to you?

California has a lot of problems meeting basic needs because so many people are too lazy to find work or too prideful to take work they think is beneath them. At that, some employers are too arrogant to take people overqualified for positions, so the problem is compounded. I know, I can't find any local part-time work because retailers don't want to hire college graduates. Why hire someone who will likely jump ship at the first sign of a greener pasture?

 

[Netto Azure]

California misses budget deadline

Gov Schwarzenegger says painful cuts are necessary

The US state of California is on the brink of issuing IOUs instead of making direct payments, after lawmakers failed to agree on ways to balance the budget.
State senators in Sacramento wrangled into the night as the start of the new fiscal year on 1 July approached.
California faces a budget shortfall of some $24.3bn (£14.5bn), but lawmakers are at odds over how to tackle it.
With tax revenues slumping amid the economic slowdown, several US states are facing a budget crunch.
California struggles to balance its budget ever year, but this year has been particularly difficult.
And the size of the Californian economy - it generates nearly 13% of US gross domestic product - means what happens there matters.

Balanced books
Amid at times heated debate on Tuesday, the Californian Senate failed to agree on Democratic proposals to shave $3.3bn from education and other programmes as a stopgap measure to address the shortfall.
Democrats believe cuts should not slash vital social programmes.
"We have that duty to make sure that no one starves," Sen Jenny Oropeza said.
The Republicans argue that much deeper spending cuts are needed to balance the budget.
They and Gov Arnold Schwarzenegger, who has pushed for moves to address the entire deficit, have also ruled out tax increases.
"No-one wants to see IOUs issued but equally important no one wants to see us continue to avoid the problem," said Senate Minority Leader Dennis Hollingsworth.
California's State Controller John Chiang said he would be forced to begin issuing IOUs from Thursday to contractors and vendors, local agencies overseeing health programmes, as well as some people who receive state aid.
"The general obligation bonds will be paid," Mr Chiang told Reuters. "California has never defaulted on its debt obligation and we don't plan to do so."
For many US states, 30 June heralds the end of the fiscal year, but several were facing crucial decisions to balance the books as the deadline neared.
Many of the states are legally required to have a balanced budget, which can mean cutting services and firing workers.

Pshaw. Our state is now issuing IOU's.

Dang nabbit with the stupid 2/3 Majority needed to pass the budget and the tax-hating right wing. :<
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