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This governor confronts state cash-flow squeeze and a RAW deal
Sacramento Bee ^ | December 17, 2001 | Dan Waters

Posted on 12/18/2001 2:17:04 AM PST by snopercod

Edited on 04/12/2004 5:32:03 PM PDT by Jim Robinson. [history]

California's looming, multibillion-dollar state budget crisis is really two interrelated but distinct income-outgo squeezes.

The first -- on which the media and most politicians focus -- is the budget itself. Plummeting state income tax revenues have driven the current budget into deficit and it could become a $12 billion-plus gap by mid-2003. Gov. Gray Davis has already called for spending reductions that he says would save $3 billion during the next 18 months, and the Capitol is buzzing with scenarios to cover the rest.


(Excerpt) Read more at sacbee.com ...


TOPICS: News/Current Events
KEYWORDS: calpowercrisis
"We've had to jump through hoops to make the governor's budget work," Davis said as he sold the RAWs in July 1994. "He seems to think he can balance a budget on wishful thinking rather than reality."

Davis's dogma just got run over by Wilson's karma.

1 posted on 12/18/2001 2:17:04 AM PST by snopercod
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To: *calpowercrisis;Ernest_at_the_Beach;Robert357
Revenue Anticipation Warrants? What next?
2 posted on 12/18/2001 2:18:44 AM PST by snopercod
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To: snopercod
"Red" Davis and Californians are learning that you can't overturn the First and Second Laws of Thermodynamics, and the Law of Supply and Demand, by governmental decree. Good luck to California's conservatives (all six of you) in getting this monster back under control. From here, PRK looks to be headed to quick bankruptcy and 3rd World status.
3 posted on 12/18/2001 2:42:51 AM PST by FreedomPoster
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To: snopercod
Gee, how long will it take Davis to blame this on G.W.?
4 posted on 12/18/2001 2:53:38 AM PST by Psalm 73
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To: snopercod
Thanks for the post. Can you explain more fully the ins and outs of RANs and RAWs? Are they secured by bonds? What is the interest rate on such?

It will be interesting to watch the bickering and back-stabbing that goes on as CA Legilators tackle the task of trimming billions off the state budget. It won't be pretty.

It will also be interesting to see if the GOP gubernatorial candidate, whoever it may be, can successfully damage Davis on this issue.

So much to watch--can Davis make lemonade out of these lemons? You can bet he won't do the right thing and get behind real belt-tightening--at least not in 2002. And if the belt-tightening is delayed beyond 2002, whoever is elected governor is going to need a corset to get the state's finances in order.

5 posted on 12/18/2001 5:10:08 AM PST by randita
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To: snopercod;randita;randita;SierraWasp; Carry_Okie; okie01; socal_parrot; snopercod; quimby...
Public officials have a multitude of ways to do financing without explicit public approval. In San Bernadino County the Arrowhead hospital was build under a program that had another acronym (which escapes me -- maybe someone reading this will remind us of the technique ).

I will ask those on the Calpowercrisis Flag List I built.
If anyone wants off the list send me a note.
Send a note if you want on the list.

6 posted on 12/18/2001 11:01:47 AM PST by Ernest_at_the_Beach
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To: snopercod
Thanks snoper, I have reposted this part of your great thread.

"But the bond sale is on indefinite hold because Public Utilities Commission President Loretta Lynch has refused to approve rates to pay for it, saying the pricey power supply contracts should be renegotiated."

"Even if the Legislature approves Davis' proposed spending reductions, the state is looking at a cash-flow deficit by June of as much as $2 billion -- unless the power bonds are floated, according to projections made by legislative number-crunchers. And if it becomes reality, it creates a dicey political scenario involving Davis and his archenemy, state Controller Kathleen Connell."

We conservatives all six of us who live in California love the irony of these two statements.

First of all Davis appointed Lynch, a life long demonicRat to chair the PUC. Now she is in his face!

Kathleen Connell, our controller is another life long demonicRat! She and Facist Davis are like watching a cat fight where both cats hate each other!

7 posted on 12/18/2001 11:31:47 AM PST by Grampa Dave
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To find all articles tagged or indexed using calpowercrisis

Click here: calpowercrisis

8 posted on 12/18/2001 12:48:40 PM PST by Ernest_at_the_Beach
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To: randita
I can't answer your financial questions. I was hoping that Robert357 would do that, but I think he has said he is very busy right now. From the California Dept. of Finance site:
Revenue Anticipated Warrants (RAWS)

A RAW is a reimbursement warrant (Revenue Anticipation Warrant) issued when there is expected to be insufficient monies in the General Fund to pay all current obligations of the State.

The key distinction between a RAN and a RAW is that to date RANs have never been issued across fiscal years.

Sounds like an IOU...

9 posted on 12/18/2001 3:00:44 PM PST by snopercod
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