Posted on 12/23/2020 6:46:22 AM PST by Oldeconomybuyer
California’s fiscal squeeze tightened up Sunday when congressional leaders reached agreement on a $900 billion COVID-19 relief package that did not include direct aid to state and local governments.
It means that Gov. Gavin Newsom faces fewer choices in fashioning a 2021-22 fiscal year budget that he must propose to legislators by Jan. 10 and that California cities struggling with budget deficits won’t be getting help from Washington.
However, Newsom, et al, have since gotten some good news from California taxpayers. Administration forecasts that revenues would plummet into the abyss as pandemic-spawned recession struck the state proved to be too pessimistic.
All-important income taxes have held up unexpectedly well because affluent Californians, who provide the bulk of income taxes, have largely maintained their income streams by shifting to home work while their stock market holdings have soared in value.
Steadier-than-expected income taxes, coupled with the spending cuts made in June, are producing a one-time $26 billion windfall for the state.
Whatever its size, the windfall potentially offsets the lack of a new federal bailout, but also creates its own dilemma.
Should the extra money be socked away to guard against projected deficits in the future or be spent on education, health care and safety net services that were cut in vain hopes of more federal aid?
Advocates for those services, including legislative leaders, tend toward a spend-it-now approach, but were they to prevail and the projected deficits became reality, the political onus would fall on Newsom.
Newsom’s 2021-22 budget will probably take a middle-of-the-road course — spending some but not all of the windfall, setting aside demands for new taxes and once again hoping that when Joe Biden becomes president, an aid package for state and local governments will be fashioned.
(Excerpt) Read more at ocregister.com ...
No bailout for the People’s Republic of California EVER, I hope.
January 7th, if China Joe gets in.
The problem here...is that when you go and do a ‘problem-state-list’....there’s NY City, the state of Illinois and the city of Chicago.
Just to suggest that you might be willing to help the group...means you need to put a minimum 100-billion on the table and that marginally buys you six months of relief before they all have to return to the table
Chicago by itself, summer of 2020, was roughly 90-billion in debt. I think Illinois is around 240-billion in debt. I think back in October for NY City...just for the city revenue issues for 2020 (Covid-era)....they were missing 40-billion from the chest of money collected (you could probably double that amount for 2021 approaching).
In simple terms, the Feds don’t have the money to save all of these players.
That is true.
Beyond a catastrophic event, the threshold question ought to be whether national taxpayers have an obligation or desire to pay for failed socialist experiments. The benefitting community will come to believe it has a right to such funding and will simply continue to elect leftist candidates.
Package that did not include direct aid to state and local governments.
Oh but it did you just have to find out what words they used to cover it up like parks education.......................
I live in Illinois. The overwhelming problem is the state retirement system. About one-forth of the state’s income goes to paying pensions. The system needs to change to a 401K style. But this is never discussed.
California has a overwhelming problem is the state retirement system too and it’s school system some elementary teachers make as much as $135.000 a year.
The unions get mega money for votes it’s why it’s a democrat controlled state also.
CA already gets over 400 bil a year courtesy federal taxpayers.
WTH have they been doing with it?!
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