Stockton not only California government in financial distress

Sacramento Bee ^ | 4/16/12 | Dan Walters

[SmithL]

It's easy – justifiably so – to beat up on Stockton for spending itself into a fiscal hole so deep that bankruptcy may be its only course.

City officials borrowed and spent heavily on a baseball park, a sports arena, a marina and other facilities in hopes of resurrecting a woebegone downtown, and simultaneously boosted their employees' salaries and fringe benefits.

At the time, Stockton was seeing a surge of sales and property taxes from a housing boom and the city's politicians and administrators wagered, in effect, that it would go on forever.

When the bubble burst, it was left with more debts and operating costs than it could afford.

Under a new state law, Stockton is now dickering with its creditors and unions over reducing its burden, and if that fails, a bankruptcy filing is next.

However, Stockton isn't alone.

The state's finances are not in any better shape. Governors and legislators have consistently overspent revenue – even when the economy was booming – with chronic budget deficits the inevitable result.

Federal law does not allow states to seek bankruptcy protection, nor should it, but California is functionally insolvent nonetheless, and has amassed what Gov. Jerry Brown calls "a wall of debt" to cover its income/outgo gaps. He's now seeking a tax increase . . .

[SmithL]

...but California is functionally insolvent nonetheless,

But instead of cutting spending, the Tax-and-Spend crowd will increase taxes. When tax revenues fall as a result, they'll just repeat the process.

[Vaduz]

But instead of cutting spending, the Tax-and-Spend crowd will increase taxes.

It’s the only way to keep the illegals here,they need the votes.