California lawmakers consider $5 billion in budget cuts(Dems talk it to death)

SacBee ^ | 02/21/10 | Kevin Yamamura

[TigerLikesRooster]

California lawmakers consider $5 billion in budget cuts

kyamamura@sacbee.com

Published Sunday, Feb. 21, 2010

In the midst of an economic free fall one year ago, state lawmakers scrambled to pass a $40 billion deficit solution in an emergency session.

Democratic leaders locked down the Capitol for days at a time. A handful of Republicans believed the situation was so desperate that they voted for tax hikes.

The pace is markedly slower this time.

California faces a $19.9 billion deficit, but lawmakers and Gov. Arnold Schwarzenegger have decided against trying to solve the problem in one February fell swoop. State leaders have held few serious negotiations so far, and legislators are girding for another summer budget battle.

Democrats hope to hold off education and social service cuts until after the governor issues his revised budget in May. Lawmakers say they want to study the impacts of program cuts and hold out hope that revenue will improve. Waiting also helps Democrats delay votes that could hurt key labor and education supporters until after the June 8 primary.

"I am not willing to wade into cutting health and human services and education deeper as our first budget act in 2010," said Senate President Pro Tem Darrell Steinberg, D-Sacramento, at the Sacramento Press Club. "Let's see what kind of economic recovery we have, let's see how big the hole is, let's see what kind of revenue options we have. But we've done enough damage. And I'm not happy about it."

[TigerLikesRooster]

P!

[unixfox]

One word for California:

DEPORTATION.

[Drango]

hope that revenue will improve

hopey, changey working for us yet?

[achilles2000]

DEPORTATION...of liberals.

[Old Texan]

Its all talk. Never gonna happen. They want the gubmit to come bail them out.

[EGPWS]

But we've done enough damage. And I'm not happy about it."

The first step is to admit that you have a problem.

[wita]

let’s see what kind of revenue options we have. But we’ve done enough damage. And I’m not happy about it.”

These jokers are convinced they are going to get a federal bailout.

I’m convinced the state should be the first to declare bankruptcy and make the tough decisions they should have made 20 years ago.

[Huskrrrr]

But I thought we would receive billions of bailout dollars. My shovel is ready!

[unixfox]

The whole state of CA will soon look like Detroit. It's what happens when socialists are in charge.

Oh well.

[TigerLikesRooster]

If California does not behave, Colorado should dam up water flowing downward into California.:-)

[SmokingJoe]

Send the lawmakers to Singapore, so they can learn how to manage money properly:

“Singapore’S Recurrent Budget Surplus The Role Of Conservative Growth Forecasts
Aided by strong economic growth the Singapore government has been able to keep both the tax rate and the government expenditure rate low and yet generate healthy budget surpluses year after year. Although the gap between the tax rate and the government expenditure rate is the obvious source of the surplus, this paper shows the presence of another subtle source, a surplus generated by conservative growth forecasts that lay the base for revenue projections. An omitted variable bias in a model based on the tax smoothing hypothesis led us to consider the role played by the growth forecast error in predicting the budget surplus. Our computations show that on average the underprediction of the tax base (GDP) must have contributed about $376 million per year to the realized budget surplus over the period 1990-2005. This appears to be simply a byproduct of the Government’s philosophy of “fiscal prudence”.

http://ideas.repec.org/p/eab/macroe/1646.html

Wouldn't it be nice, if we had a government that regularly UNDERpredicts goverment income in their budgets, and actually made money from interest on the cash hoard that the government had accumulated from years of running budget surpluses? We need a revolution in this country.

[NoRedTape]

California can still make Billions of cuts. Start with the Coastal Commission and work it from there.

[IllumiNaughtyByNature]

Here is a little quote from The Economist back in 2008 talking about the California ARM timebomb.

The biggest wave of recasts is due to happen in 2010 and 2011 [. . .] borrowers' monthly payments will then surge by 60-80%," (The Economist, 8/14/08).

BOOM!!

[Vaduz]

Revenue options,taxes,more taxes,tax on taxes,tax on taxing ......

[shorty_harris]

California can still make Billions of cuts. Start with the Coastal Commission and work it from there.

Throw in Cal/OSHA too...

[eyeamok]

Deceptive Headline at best, should read:

California Legislature attempts to put Band-Aid on Self-Inflicted Gunshot Wound.

[Freedom_Is_Not_Free]

California needs $25 Billion in budget cuts. Real budget cuts. Not cuts in future spending. A real $25 billion cut from the 2009-10 fiscal year budget.

This year’s budget fight is going to be nasty. I’ll be shocked if it really solves anything.

If I don’t see $25 billion in budget cuts from 09/10 FY, it ain’t going to matter.

We are so screwed here in California.

[Freedom_Is_Not_Free]

Good reminder of wave II. We will see if it holds up, because I know that a LOT of these ARMS have been re-financed to 30 year fixed mortgages with today’s low rates.

I think we will have a Foreclosure Wave II, but knowing that many of these ARMs have already been re-financed to fixed, I won’t be absolutely shocked if wave II proves to be mild rather than violent.

[IllumiNaughtyByNature]

I would disagree with your assesment that A LOT have been refinanced due to the stricter guidelines on income and the overall appraised values of the houses. There are A LOT more that are still plugging along that are still ARMS.

start here

and here

here too

this too

These are a good start. The key take away was from the 2nd article that said 94% were making minimum payments. BOOM!