PING!
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Posted on 08/18/2003 10:31:33 AM PDT by NormsRevenge
Edited on 04/14/2004 10:06:21 PM PDT by Jim Robinson. [history]
SACRAMENTO
(Excerpt) Read more at 2.ocregister.com ...
| RELATED STORIES | |
| • A list of risky assumptions about sources of state income |
|
In addition to normal risks built into any budget – such as an overly optimistic economic outlook or more school kids than anticipated – the state's $99 billion spending plan also relies on a number of pieces that might not come through. They include:
Gaming: The state expects to renegotiate and sign dozens of compacts with Indian tribes that run casinos. Only one tribe so far has agreed to give money to the general fund, and it's only a fraction of the total. At risk: $680 million.
Contract renegotiations: The state plans to save money by renegotiating existing supplies contracts and buying things in bulk for various state agencies. But this hasn't happened yet. At risk: $50 million.
Workers' compensation reform: The state is expecting lowered premiums as a result of reforms. But reforms have not even been proposed. At risk: $30 million.
Unidentified savings: No one knows whether the state has a plan for where cuts totaling this amount will be made. At risk: $180 million.
Employee savings: The state is negotiating new contracts with 21 labor groups to lower state worker salaries and eliminate positions. Negotiations are under way, but the outcome is uncertain. At risk: $1.1 billion.
Tobacco bonds: Investors could be skittish about buying state bonds, which are backed by tobacco companies, such as Philip Morris USA, Inc., which faces legal and financial problems. At risk: $2 billion.
Vehicle license fee: The state will begin tripling fees in October. But it is the subject of a court fight. At risk: $3.9 billion.
Deficit reduction bond: This money is key to wiping out the deficit, but the reliance on borrowing has prompted threats of a lawsuit expected to be filed this week. At risk: $10.7 billion.
Pension obligation bond: The state is borrowing money to pay for state workers' pensions. But there is a court challenge. At risk: $1.85 billion.
Total risks: $20.49 billion
I'll wager $500M Davis Dollars and $700M Bustamante Bucks that California will crash and burn.
Time will tell. In the meantime, I'm here in L.A. just watchin' and waitin'.
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