Posted on 10/11/2008 11:00:08 AM PDT by John Jorsett
With credit markets in New York in crisis last week, California Gov. Arnold Schwarzenegger sent an extraordinary letter to Treasury Secretary Henry Paulson asking for $7 billion. Although the governor has since withdrawn that request, it testifies to the dire state of his budget.
Yet days before penning his note, the governor told an audience at the Commonwealth Club of California not to worry about the state's budget crunch and to approve $9.95 billion in new debt on the November ballot to build a bullet train to connect Los Angeles to San Francisco: "Just because we have a problem with the budget does not mean people should vote 'no' on high-speed rail." (A spokeswoman confirmed Monday that, despite the request for federal money, the governor still supports the initiative.)
Actually, the state's budget woes should give votes pause -- especially since high-speed rail is a fantasy that has as much chance of delivering on its promises of creating 450,000 jobs, vanquishing road congestion and lowering greenhouse gases as "Conan the Barbarian" had of winning the Oscar.
The GoldenState's finances are a mess. California's general obligation debthas tripled in the past six years and is now almost equal to the state's $145 billion annual budget. Even without any new loans, in three years the statewill spend a record 6.1% ofits budget just to service the debt it already has. What's more, with the economic slowdown, the state is now expecting a deficit larger than $1.1 billion for the first three months ofthis fiscal year. Thestate's rainy-day fund is running dry, which has hurt its credit rating.
Under such circumstances, the prudent course would be to avoid taking on new debt, even for worthwhile projects, much less sure-shot losers such as the high-speed rail. But in California, prudence is in short supply.
(Excerpt) Read more at online.wsj.com ...
Who CARES? Feinstein, BOXER, Schwarz.....ARNOLD, Maxine Waters, Peter Stark, George Miller, etc., etc.. Until this state suffers terribly it will never change.
Can’t California sell some oil leases or something?
Big government California style, available soon in all 57 states courtesy of Obama, Pelozi and Reid.
I once read an interesting article here (years back) that described how governments at all levels keep hundreds of phantom “jobs” on the books so that when they need to “cut jobs” they can either “cut” the phantom “jobs” or move people who they claim they have “layed off” into those jobs. Essentially, they’re just operating a big shell game.
Governments NEVER actually lay people off (unless those people are due to get a monthly kiss in the mail and other obscene retirement bennies anyway). Government also NEVER actually cut spending - - they just trim projected automatic budget increases and call THAT a “cut” in spending.
The scumbags have it wired, and first and foremost they take care of THEMSELVES.
We need this high speed rail system. Think of the benefit.
Illegals will be more available if we can move them throughout the state quickly where cheap labor needs dictate.
BANKRUPTCY OF THE STATE
That will only work if Wall Street gets to dictate the state's spending priorities and the Legislature no longer has any say.
The screams from the public employee unions would deafen the world. ;)
A Los Angeles to San Francisco high-speed rail line will never come close to earning back its tremendous cost - they could build a couple more regional airports on either end for a lot less. Los Angeles to Las Vegas would have a better chance, but they need to try widening and increasing speed limits on I-15 first - that would also be much, much cheaper.
good. the state is a haven of liberalism. Let it get what it voted for.
Somehow, cutting actual spending is not ever considered when there isn’t enough money to pay for everything in the budget.
Our lobbiest told us yesterday that the state is already $1.5 billion down in expected revenues. It is anticipated that the Gov. will wait until after the election to pull in the newly elected legislature to make additional cuts. He is already able to borrow funds. He will take any Prop. 10 and 63 monies not already nailed down - even reaching into the counties. He will also go after the PERS retirement reserves. He can also cut another 7-8% off authorized appropriations for 4 months.
If he goes after the counties, he may end up with several General Law Counties in bankruptcy, which the state must also back. (These are considered an extension of the state vs. charter counties.) I know, as a small county, we have already cut about $4 million from last year’s Gnereal Fund budget levels and are faced with another million and a half to cut because the just passed federal Rural Schools reauthoration reappropriated Title II and III monies away from funding county services. We will be holding a special session to consider additional cuts and possible layoffs in the next several weeks.
Gonna be a bumpy ride.
I knew when crunch time came, the state would raid anything it could get its mitts on. The recession is just getting started, so the revenue drop is going to be even greater, and the budget deficit even more severe. It would be great entertainment if we weren't stuck observing this train wreck from inside the front car.
Until then, they can eat cake.
Right.
cal has neither requirement (balance budget nor a rainy day fund)
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