Posted on 11/20/2003 8:56:02 AM PST by FairOpinion
"... the governor faced concerns from fellow Republicans over his plan to deal with California's fiscal difficulties without a tax increase.
Brulte said he expected the borrowing proposal to pass the Senate eventually. But Sen. Tom McClintock (R-Thousand Oaks) said he would vote against it, and other Republicans interviewed Wednesday echoed concerns already raised by Burton and other Democrats.
"I think it's fiscally irresponsible to use long-term, general obligation bonds to meet state expenses," McClintock said after the Senate session. "That is why, for over 100 years, the state Constitution has prohibited that practice to prevent a prodigal generation from running up a huge debt while it parties, then passing the bill on to his children."
He added, "A deficit bond will not have my vote."
Brulte said the key to Schwarzenegger's fiscal recovery plan was a cap on state spending, a central Republican demand. "If the price I have to pay for a spending cap is a willingness to support a deficit bond, I'm willing to look at that," Brulte said. "But our prime objective is the spending cap."
(Excerpt) Read more at latimes.com ...
Yes we do by about 15%.
A sound solution is to localize the problem. Relegate the state's educational oversight function to perforamnce testing and give the education responsibility and the revenue stream back to the counties (pre 1980's system).
It won't take the counties long to figure out that they can't sustain the education budget until someone regulates immigration. When the rubber meets the road then the inevitable will happen.
Wow, Democrats get it, but some FReepers still don't.
I can appreciate the position of someone like fourscore, but what's up, Fair, are you on Arnold's payroll or something?
CA already has one of the lowest bond rating. If they float more issues in the market, the only way they will be able to pay off is by offering a high interest rate. The most insane and saddest thing of this situation is that unlike using a bond issue to build something that may generate revenues, this will only go into the general budget to fund govt agencies. In other words, not a dime will go into economic expansion but to support the present bureaucracy. This is exactly why third world countries never get out of debt.
There will be only two ways to get out of it. The state can default, at which point forget about any future bond issues. Or, CA can start begging the federal govt for debt relief painting the spectre of hungry children running naked on the streets, no cops to protect the innocent, etc etc. At that point, it will be a tax increase for the whole country. The solution is that things are so bad, this is the perfect opportunity to take a sledge hammer and rip the state budget. It will be classic. Arnold - the real-life Terminator.
Do you mean the free/reduced lunch program which is federal?
Publius6961 said: "The California Constitution prohibits deficit spending."
Publius6961 makes it sound like Kalifornia already has a constitutional spending limit. Perhaps it didn't work because liberals will attempt to spend the money anyway. Now Arnold appears to be doing the same thing.
Davis encouraged the legislature to pass some $12 billion in "deficit bonds" to allow state spending to exceed revenue. Now Arnold is proposing to do the same thing.
The courts are about to rule that Davis' "deficit bonds" are illegal because they have not been approved by a vote of the people. Arnold's "deficit bonds" may well be ruled illegal by the courts because they are not intended to finance capital improvements.
I pointed out on another thread that recent calculations of how much deficit funding is needed seem to assume that the part of Davis' deficit bonds which have already been sold can remain in circulation. This may be as much as 3 or 4 billion. When the courts rule that these bonds must be refunded, I expect that Kalifornia will experience an immediate cash crisis and will default on its payments.
Really? What are we doing today, that we weren't doing four years ago, that cannot be stopped? Tell us what some of these items are and what makes them so special that we must wait until next year to cut them?
Or do you support a $15 billion "deficit bond" issue every year?
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