California Screaming
California's budget woes continue to mount, and the state legislature appears to be stuck in paralysis mode. As this article in today's Los Angeles Times points out, with the lack of cash on hand, the state may have to stop multiple public works projects.
Road, levee, school and housing construction projects throughout California are on the verge of being halted or delayed, as state officials prepare to shut off their financing in the most drastic fallout yet from California's cash crisis.
Officials plan to meet today to freeze financing on these projects and about 2,000 others, including park improvements, environmental restoration and repairs to state prisons.
Many of the projects were authorized by voters in 2006 and championed by Gov. Arnold Schwarzenegger in his reelection campaign that year. ...
Admittedly, a large part of the problem in this area is the nation-wide credit freeze. As the article points out, last month the state was unable to sell two-thirds of the bonds it routinely uses to cover such contingencies, which means a shortfall of about a half a billion dollars. However, even if the market were operating as usual, it is questionable that investors would be as free with their cash to a state that can't even put together a reasonable facsimile of a plan to staunch the hemorrhaging in the state.
So today, the state's Pooled Money Investment Board will meet and will have to decide whether to stop funding these various projects, some of which are already in progress. If those projects are stopped, the results will be devastating, according to State Treasurer Bill Lockyer:
Lockyer told legislators last week that halting public-works projects would have a ripple effect through California's economy, costing private companies $12.5 billion and eliminating 200,000 jobs. [Emphasis added]
Meanwhile, the state legislature continues to be held hostage by its Republican members who adamantly refuse to approve anything that smacks of increased taxes. Because of a state law which requires a two-thirds majority for such hikes, the legislature is reduced to voting on bills which won't pass and wouldn't pass muster with the citizenry even if passed just to look like they're doing something about the problem.
It's going to be a long, cold winter for the State.
Road, levee, school and housing construction projects throughout California are on the verge of being halted or delayed, as state officials prepare to shut off their financing in the most drastic fallout yet from California's cash crisis.
Officials plan to meet today to freeze financing on these projects and about 2,000 others, including park improvements, environmental restoration and repairs to state prisons.
Many of the projects were authorized by voters in 2006 and championed by Gov. Arnold Schwarzenegger in his reelection campaign that year. ...
Admittedly, a large part of the problem in this area is the nation-wide credit freeze. As the article points out, last month the state was unable to sell two-thirds of the bonds it routinely uses to cover such contingencies, which means a shortfall of about a half a billion dollars. However, even if the market were operating as usual, it is questionable that investors would be as free with their cash to a state that can't even put together a reasonable facsimile of a plan to staunch the hemorrhaging in the state.
So today, the state's Pooled Money Investment Board will meet and will have to decide whether to stop funding these various projects, some of which are already in progress. If those projects are stopped, the results will be devastating, according to State Treasurer Bill Lockyer:
Lockyer told legislators last week that halting public-works projects would have a ripple effect through California's economy, costing private companies $12.5 billion and eliminating 200,000 jobs. [Emphasis added]
Meanwhile, the state legislature continues to be held hostage by its Republican members who adamantly refuse to approve anything that smacks of increased taxes. Because of a state law which requires a two-thirds majority for such hikes, the legislature is reduced to voting on bills which won't pass and wouldn't pass muster with the citizenry even if passed just to look like they're doing something about the problem.
It's going to be a long, cold winter for the State.
Labels: Budget, California, Economy
posted by Diane at 3:45 AM
2 Comments:
Bet they could balance that budget PDQ if they started screening for all expenditures directly benefiting Republicans only and just stopped making them.
California is held hostage by its "no taxes" Republican minority.
California is one of a few states that require a 2/3 majority for taxes (probably an intiative that passed!). So that means that 3 Republican votes can halt ANY initiative to raise fees or taxes that would balance the budget.
In 1977, California voters passed Prop 13 -- ostensibly to protect grannies from rising property taxes on their appreciating homes. The major beneficiaries were corporations, including the freight rail industry, whose taxes were frozen at 1977 levels.
Arnold is governor because Californians ousted Democrat Gray Davis for proposing that auto transfer tax fees be raised to stave off state budget cuts. Arnold has proposed the same tax fee raise (also refused by the current California Republican reps), to keep the state from bankruptcy.
Today, California is 43rd in the nation for school funding -- with the Republicans suggesting a mid-year axing of the tiny school budgets, so they don't have to vote for new taxation. We have crumbling roads and infrastructure.
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