California braces for repeat of last fiscal crisis
The emergency budget session, called by Schwarzenegger, will not tackle the entire $20 billion deficit that is projected over the next year and a half. It will target the $6 billion shortfall in the current year, leaving longer-term funding for core services such as public schools, colleges and health services in a state of uncertainty.
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Democrats are searching for ways to sidestep the rule that requires a two-thirds vote of the Legislature for tax increases and to pass state budgets.
Repeat. This is not a revenue problem, this is a spending problem and no amount of taxing authority will fix it. If the Democrats succeed in obviating the 2/3rds requirement the exodus of business and upper income people will be breathtaking.
8 comments:
This is exactly what you get when you buy twice as much government (re:CA government spending has roughly doubled in the last decade)
The uber-wealthy and businesses can run. It is a lot harder for the rest of us. In other words, if they raise taxes to "solve" their problem this state will become a red state in two years.
Even if they violate the constitution to raise taxes, Schwarzenegger probably vetoes it as he still stings from the public rebuke he got on his last tax increase.
There is science, logic, reason; there is thought verified by experience. And then there is California.
---Edward Abbey
One of the fundamental problems with government right now is no one is responsible for solving the problems. The state would be better off if the Democrats were allowed to raise taxes and if they failed to solve our problems, the Republicans would come in and cut. As it is we cannot pay our bills and we cannot cut our expenses.
I'm still wondering where the extra spending went. They claim revenues are down to '03 levels, so why are we in the hole 20B? Why are we spending so much more in just 7 years? Where did it go? I'm certainly not seeing gold plated freeways or anything.
I hear that Casey will sign a promissory note to cover the shortfall.
Two stories in the LA Times today ...
New wave of foreclosures by end of 2010 is feared -- About 4 million U.S. homeowners are 90 days or more delinquent on their loans or in foreclosure proceedings, Moody's Economy.com says. A federal loan modification program is helping a relative few.
Surprising increase in souring mortgages -- The rate of homeowners falling behind on mortgage payments surged unexpectedly in the fourth quarter, with home loans 60 or more days past due reaching 6.9% of all home loans nationally, 11.0% in California and a whopping 18.5% in Riverside County, according to a study released Tuesday by credit reporting firm TransUnion.
Just got back from a business trip to Houston. The airlines are running smaller planes to keep yield up/costs down, yet the airports are still dead. Not only on the inside, but outside. No waiting for a plane to get get a gate. The tarmac is barren of planes. Where did all the big planes go??
Texas is called a "hot" economy and Houston is supposed to be the fastest growing, yet is a TON of empty CRE along the highwyas. But I digress..
I had dinner with several folks from Sacramento and San Diego one evening, along with a gentleman from Boise. Us mountain men were curious as to how could California screw up so badly. Insane housing prices, no land, crazy taxes, no basements (what's a basement??) and the frigg'n ground shakes.
The Golden Staters just smiled and shrugged their shoulders.
The thing people forget about the last idiot (jimmy carter) and those crazy interest rates was the fact business & consumers had to compete with government for funds. The government will pay any rate. This will slow innovation, purchasing and our recovery.
When will we learn?
h.
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