Is Calif. Facing Fiscal Collapse?

America's most populous state now faces a budget deficit which could collapse entire nations -- more than $500 for every man woman and child in California.  And that's just the deficit, not the parts of the budget which are already funded.  How do you think that may impact the rest of our nation? 

It's not that anyone expected the Golden State's financial situation to be good.  But months of belt-tightening had led many to believe that the budget shortfall would be more along the order of $4 to $7 billion.

Instead, the Los Angeles Times reports it has learned the deficit will be $21 billion -- and some put that number at $24 billion.

That could come to around $600 for every person in the state -- much more than a thousand dollars for every family.

And, unlike our federal government, the state can't employ deficit spending to get through tough times.

Moreover, fractious politicians virtually assure a protracted fight over the issue in the state's legislature.

What role -- if any -- do you see for President Barack Obama and our federal government in this looming crisis?

And, as if its existing budgetary problems were not enough, this news just broke on the Daily 49er:

CSU to request additional $884M from state

The board of trustees is expected to approve the 2010-11 budget proposal Wednesday....

California Governor Arnold Schwarzenegger said on Wednesday he opposed tax hikes to close the state's budget gap, projected to be bigger than expected in the next fiscal year....

Well, of course he opposes tax hikes .. he's a Republican. And he came into office with a promise (which he kept) of lowering the vehicle license fee.

So, California has a low VLF, low property taxes (from Prop 13, passed years ago) and they won't raise income taxes. Meanwhile everything is more expensive every day.  What's a state supposed to do?

Maybe it's time for the people and the legislature take a look at those expenses and decide which should be reduced or eliminated.

I agree with you, Kurt, but not with the Governor's principle that cuts should be made to the youngest and weakest citizens.

Cutting home health aides to the elderly poor will only mean that they have to go to state-funded nursing homes; a much more expensive option.

Cutting education means that we'll have to import another group of Austrians to govern our state. <g>

Nobody's talking about cutting the state-paid auto expenses for the legislators, or for lowering the number of layers of administrative assistants. They seem to be more interested in making janitors and social workers go on unpaid furlough days.

>>  I agree with you, Kurt, but not with the Governor's principle that cuts should be made to the youngest and weakest citizens.   <<

The governor of your state, Gretchen, is applying a very rational calculus.

The youngest among us are too young to vote, and weakest are least likely to fight back or exact retribution at the ballot box.

Best regards,  4merCL

>Also the iniative process just kills California.<

I agree with you on this. It is far too easy to get initiatives on the ballot in CA. One side effect is that the voter's handbook every major election year looks like a Manhattan phone book.