This Recall thing has legs. Let it stand, imo. It is important for taxpayers everywhere see that We the People can say No.. In more ways then one, if need be.
From the Sac Bee & Alexa H.Bluth yesterday
State can run until August on loans
California secured a low interest rate from investors for an $11 billion short-term loan to keep the state afloat, despite poor credit ratings and warnings that the cash-strapped state is falling out of favor with Wall Street, Controller Steve Westly announced Wednesday.
But, analysts and financial officials cautioned, the loan still is costing tens of millions of dollars in fees and interest, and California's fiscal standing remains fragile as the state barrels toward Sunday's key budget deadline with political battles raging.
"The concern in the finance community continues over California," said Claire Cohen, vice chairwoman of Fitch Investors Services. "They don't seem to be much closer to a budget agreement, and may be even further apart than they were."
California lawmakers are at odds over how to fill a budget deficit estimated to reach between $29 billion and $38 billion.
The gridlock over tax increases and program cuts has led many lawmakers to concede they will miss a seldom-met constitutional deadline Sunday and has cast doubt on the prospect of a budget deal before the July 1 start of the fiscal year.
California Highway Patrol officials on Wednesday prepared to send notices of possible layoffs to 469 of the force's 7,000 officers.
The letters, likely to be sent next week, are largely procedural at this point, and are being sent to workers in nearly every state agency as the state attempts to renegotiate employee contracts to shave hundreds of millions in costs, said Lynelle Jolley, a spokeswoman for the Department of Personnel Administration. Officials are hopeful a budget deal can be crafted without mass layoffs but have directed departments to begin the legal process.
"Obviously my hope is everything is resolved and the letters are for naught," said CHP Commissioner D.O. "Spike" Helmick.
Westly, meanwhile, delivered a rare sliver of good fiscal news Wednesday, announcing that 10 bidders made 52 bids to purchase warrants to help the state pay its bills through August. The state sold the warrants at an average 1.13 percent interest rate -- with an added $210 million in borrowing costs, less than originally expected, Westly said.
Still, he called on lawmakers to quickly pass a budget and include a new revenue source -- namely a half-cent sales tax -- to back future borrowing.
"We still need a budget, or California's long-term financial reputation and our ability to borrow in the future will be severely damaged," Westly said.
Gov. Gray Davis' finance director, Steve Peace, said the interest rate was higher than it could have been if the state had better credit -- he said Los Angeles County secured a 0.9 percent rate on a similar loan recently. He also said the state would have been unable to issue the warrants without promises of a balanced budget and backing from banks that guaranteed to pay off the loans if the state defaults.
The loans, Peace said, cost $109 million more than if the state had better credit: $25 million more in interest costs and $84 million to persuade banks to "co-sign" the loans.
"We are perilously close to losing the trust of the market," Peace said. "This was a sale that was clearly against the credit rating of the banks, not the credit rating of the state."
The warnings came as divisions intensified between Democratic and Republican lawmakers and as a new statewide poll showed little public support for sweeping tax increases.
Republican lawmakers -- whose votes are needed to meet the two-thirds requirement to approve a budget -- said they will not budge from their position against tax hikes. A new Public Policy Institute of California poll showed state residents rejected all but one tax hike -- a boost to the cost of cigarettes.
The Democratic governor's budget plan calls for a temporary half-penny sales tax increase to pay off $10.7 billion in proposed deficit bonds, as well as increases to cigarette taxes and income taxes for top earners.
According to the survey, 45 percent support a higher income tax bracket, while about half oppose the idea and more than half oppose the sales tax boost.
Davis defended his budget blueprint, despite the lackluster showing in the poll for many of its components.
"If I have to choose between maintaining our progress in public education, continuing to provide health insurance for children, and continuing to protect you against both crime and terror or raising taxes, I am going to raise taxes," Davis said.