Posted on 05/29/2009 7:36:30 PM PDT by NormsRevenge
As though the state’s fiscal condition weren’t dire enough, Controller John Chiang sent a letter on May 29 to the governor and legislative leaders saying that on July 31 the state will be $1 billion short of meeting its payment obligations to schools, local governments and vendors.
“Based on the May Revision revenue and expenditure estimates provided to us late last week by the Department of Finance and taking into account the actual cash receipts and expenditures my office tracks, it is clear the health of the State’s treasury has significantly deteriorated since the adoption of the (budget), a mere three months ago,” Chiang wrote.
And, Chiang says, the situation only gets worse. In April 2010, the state will be $22 billion short of cash to meet its payments.
“That is more than four times the $5.1 billion cash deficit we faced this past spring,” the letter says.
Lawmakers and the governor need to act well before the end of July, Chiang points out.
The controller is preparing to sell Revenue Anticipation Warrants to cover some of the cash flow problem but “without credible budget and cash flow solutions in place, the rating agencies and potential investors who will be evaluating the credit risk of these securities will be highly skeptical about investing in California.”
Failure to act “can compromise the success of this sale or further increase what is expected to be the largest financing costs in the State’s history.”
In short, Chiang says “the state will not be able to borrow its way out of this crisis.”
Chiang “strongly” urges lawmakers and the governor act by June 15.
“Inaction would create an even greater fiscal hardship for Californians, especially those businesses that provide goods to the State and those vulnerable individuals who depend on public health and social services.”
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Gee ... that means they have only a couple of other options ... they could increase taxes to generate more spending power, or they could ... they could ... Gee ... I just can't think of anything else ...
I guess it will have to be taxes.
As a resident of this state, who voted for Tom McClintock for governor, I’m hoping that CA will crash and crash badly. Only then will we have any chance at all of cleaning house and getting rid of the Marxists who have flushedd this state down the crapper.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Well......as long as the prisoners get their aromatherapy.....that’s the main thing. /s
Do you really think the average voter can put two and two together and conclude we need to throw the commies out? I rather doubt it.
Selling “Revenue Anticipation Warrants” — what a joke. Why would you anticipate any revenue when you’ve got the highest tax burden in the nation and people and businesses are voting with their feet? The rating for these warrants will be in the toilet and the state will have to pay very high interest rates, exacerbating the problem.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
Maybe Arnold could get an emergency loan from Mexico to tide him over. ;~))
The notion that voters have any say in government is quaint, and old, and out of date.
California has two choices: raise taxes or cut spending. The people won't approve tax increases. The government won't cut spending. That means government will raise taxes.
The tree of liberty thirsts.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
c.....u......t
The situation in California is the result of left-wing ideals and principles reaching their logical conclusion. Bankruptcy and collapse.
Good going, Republicans!
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus
The situation only gets worse $22 billion in the hole.
Unreal. They need to deport illegals, cut their benefits, offshore drilling, cut taxes, cut enviro regs, let cities go belly up to reneg or DK on insane govt union workers lavish benefits. There is no magic wand.
Obama spent everything America had or could borrow in 3 months.
It's been like this since the first stimulus bill. The government has decided to ignore the voters and just keep spending. It's like we have no voice.
I think you hit the nail on the head!!
I am seeing more and more CA license plates that I have never seen 3,000 + miles away. Grapes of Wrath in reverse.
In the 1930s CA kept the Okies from fleeing the Dustbowl. We need to build fences to keep the locust in. They will want to turn your state into CA.
California can bail itself out by pumping more oil off shore. It could benefit the country and take care of itself. Instead of asking for a handout, let them sell what they have and work for it.
We fought a war to keep states from seceding. How about we fight a war to force states such as CA to secede?
‘You ain’t seen nothing yet’
The state must not cut funding for vital “green” projects and embryonic stem cell research, etc.
As I recall, during one of the previous fiscal crisis, the irresponsible governor was outraged to discover that no one on Wall Street would sell his bonds unless the State demonstrated some fiscal discipline. He vowed never to knuckle under to the "gnomes" on Wall Street, but eventually he was forced to.
This would be a great lesson for the State to re-learn.
Major spending cuts are needed. Cutting off services to illegals would be a great first step. Reduce welfare until the bums move somewhere else, and try reducing taxes to attract more business and increase revenue that way.
Your theory is good, but guess who the ignorant chattering class in California will blame? That’s right - - the Republican governor. Shoulda just left Gray Davis alone. That guy must be laughing his rear-end off.
You'd be right. The average California voter couldn't answer one of the following three questions correctly.
California's largest revenue source is:
a) Personal income taxes
b) Corporate taxes
c) Sales taxes
d) Property taxes
e) Fuel taxes
California's current budget is effective for the period:
a) Calender 2009 (January through December 2009)
b) Fiscal 2008-2009 (July 2008 through June 2009)
c) For the 12 months immediately following passage of the budget
d) During the same 12 months the US budget is effective
e) The California Legislature, with the governor's approval, sets the budget period.
What percentage of California residents, over 18 years of age, pay more than $100 annually in state income taxes:
a) 10%
b) 25%
c) 50%
d) 70%
e) More than 95%
Before you continue, quick tell me where FreeRepublic has it's headquarters.
The last two best Repub Presidents who were not poart of the yale/harvard establishment were from CA too.
I greatly admire john & ken and what the voters in CA did recently. I am hoping this implosion wipes out the Dems but I think it may turn the state into MI where it remains a disaster and broke.
I am from Georgia, so I don’t feel too bad that I don’t know the answers. What are the answers?
Uh Oh. I live in CA and I would fail your test. The only test that really matters is a) do you think we are overtaxed? b) do you want to keep the bennies coming in no matter how much you have to tax the other guy?
They should all move to Texas!
Just kidding - I don't really have a desire to be shot.
"Because WLAC is a public college, we can keep tuition low and quality high. CA Resident Tuition $20 per unit "
Liberal fascists have a death grip on the state and absolutely zero concern for the citizens who once made it a great state. But no longer. After 30 years of watching it swirl around the toilet bowl (which is an apt metaphor, because Calee-fuor-neeya kinda looks like a big t-rd) I cannot wait to get out of this hellhole. My God, you cannot believe the stupidity of the feminazis who run this place. Think Nancy Pelosi times 350,000 state workers. But I’m waiting to move until one of the states declares sovereignty or secedes, so hurry up, Texas!
no matter what happens, it is going to be intesting.
One revenue enhancer that has not been tried is to cut gov regulation, i am not sure that is in the cards, but stranger things have happened, though no often.
Privatize K-12 schools. Get the government out of the school business. This will save $30B from the budget. Then sell the school properties...
” Maybe Arnold could get an emergency loan from Mexico to tide him over. ;~))”
Maybe Arnold can send them back to Mexico nice and neatly wrapped with a big bow.
You’ll KNOW when the Legislature has their asses pinned to the wall during “budget reduction” time:
1.When illegal aliens become ineligible for free public schools, free medical, free hospitalization, free maternity, food stamps, Medicaid, SSI, real estate purchases, bank loans, checking accounts, public housing and the freedom to move about the state in a “sancturary” environment...
2. Outlaw and dissolve all civil service unions.
3. Negate and renegotiate ALL civil service salaries, benefits and pension plans.
4. Cut elected state legislature and state University salaries immediate by 30% and freeze at that level until the State is out of debt with a “rainy day” buffer of at least $10B...
These would be simply the FIRST measure implemented — more must come soon.
Cali isn’t up against a wall, yet. The state can still sell oil leases, tax new oil production, sell monopoly distribution rights to vendors in state buildings, sell airport leases, sell harbor leases, sell state land, sell tax-cuts (e.g. you pay 5 years of property taxes *now* in exchange for a lifetime exemption from property taxes after 5 years), etc.
Plus, Cali will sway the federal government to guarantee its revenue warrants.
That being said, Cali is revving past the red line. After a few revenue tricks such as those listed above are used up...well, then Katie bar the door!
Do you really think the average voter can put two and two together and conclude we need to throw the commies out? I rather doubt it.
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Americans seem to be specialists in ignoring the washed out bridge until they are inside the minimum braking distance. California passed the point of no return several years ago. I am afraid the entire nation may have passed it already.
Taxes have gone up $14 billion already. Its never enough. Of course it isn’t - and won’t be.
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It seems to be the same everywhere. Even South Carolina is in fiscal trouble, a state that used to take pride in running a sizable budget surplus and maintaining a reserve fund. When the population density was much lower tax rates were lower and yet there was no revenue problem. It simply does not make sense that population dense areas should have higher tax rates, it should be the other way around if the money was spent wisely.
California needs to follow Michigan’s example and start a “Cool Cities” program. This involves stealing money from productive communities and giving it to thieving politicians and bloated bureaucracies in big liberal cities.
You spend billions to convert dead factories to lofts, open up free hippy health clinics, Jihad tofu restaurants and head-banger clubs and post a sign at the city limits stating this is a “Cool City.” Then you invite in gang bangers, kids with ungowa rings in their noses, eyelids and tongues and several thousand winos and addicts. Then you advertise to corporate head hunters that it’s a “cool” place to recruit for CEOs, engineers and venture capitalists.
Don’t argue with me. Look how well it worked in Detroit.
Looking good.
just...suppose the Feds decide to shut down all of the state government and “Federalize” all employees...paying all “state” taxes directly to the Federal Treasury.....IMHO..they WIL try this to pre-empt secession
They will retain the title of state but convert to nothing more than a federal tax district.
As I see it, if a state becomes unviable, then it should revert to territorial status, and that means Zero congressmen or senators.
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