Free Republic

SACRAMENTO — The bills from California's record borrowing binge are coming due, and they are so staggeringly high that financial experts warn paying them back threatens to stall the state's economic recovery. Creditors are knocking on California's door at the same time the state sorely needs money to undo years of neglect to freeways, schools and water systems. The state's overall credit card bill now stands at $51 billion, most of it for public works projects to be repaid over several years. A steep run-up, however, came earlier this year with mega-borrowing that voters approved in March to get the...

It is generally agreed on Wall Street that states should keep the share of their budget that goes to paying down debt to below 6%. California was at less than 3.4% last year. Next year, it will be at 6.4%. Assuming the state stops borrowing now and doesn't authorize any more bonds for anything — an unlikely scenario — the number is projected to grow to 7.5% by 2009. ... Assemblyman Keith Richman (R-Northridge) described those accounting shifts to a group of business leaders at a recent economic conference at UCLA this way: "If you used them in your own...