Posted on 12/11/2023 9:20:52 AM PST by bitt
Financial expert Chriss Street says that California is in an existential financial crisis. The state is losing billions by the month, and prospects for the future are even worse.
Chriss Street knows California’s financial status. He has written articles on California’s financial woes for more than a decade. He was one of a handful of individuals selected to figure out how to get California out of its financial mess after the Great Recession of 2009, and he knows the financials of the state.
He has been warning for some time that the state is in serious financial trouble, much more than is being reported. This is one of many reasons Street is behind the split and formation of the new state of New California.
In an exclusive report supplied overnight, Street says the following about the financial situation of the state of California.
The non-partisan California Legislative Analyst Office just acknowledged the State of California business model has collapsed. After projecting $14 billion in deficits for the next two years in May, the LAO now projects the State of California faces $100 billion deficit over the next 18 months and $187 billion over the next four and a half years.
The financial press is calling the grim alert a shocking surprise, but the New California State movement that seeks to split the state in half has been issuing similar estimates for several years. The warning signs of an existential crisis has been brewing include California unable to issue a timely audited financial statement since 2018, over 1 million residents leaving the state, and collecting lower taxes after raising tax rates.
California since 2021 has burned down $97 billion of reserves to about $26 billion at the end of November, and is running $4 billion of negative cash flow per month. The liberal California Legislature also recently passed a law that limits its local school districts to holding a maximum 3% budget reserve, about 10 days of funding.
The real culprit for the accelerating crisis is the end of the globalist boom that began in California 45-years ago with the Proposition 13 Tax Revolt that catapulted former Governor Ronald Reagan to the White House. President Reagan slashed the 87% capital gains tax rate to 27%, kicking off the greatest venture capital boom in history.
Below is Street’s memo.
...more
“California has a horrible Public Employee pension problem that will lead to many municipal agency bankruptcies and defaults that fall back on the State Budget.”
Good post.
It is too late to fix that—eventual game, set, match.
Many old corporations just threw in the towel on the pension issue and declared bankruptcy.
I expect CA will have to do the same—but I am not a good enough number cruncher to know exactly when that will happen.
The big burden on CA’s budget is their govt employee pension programs, millions of them getting their pensions while living large in other states.
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