Thursday, August 7, 2008

Prison Health Care

"A federally appointed receiver assigned to fix the prison health-care system in California says he will force the state to come up with $2.5 billion to begin improvements-just as legislators are confronting a budget shortfall of over $15 billion this fiscal year. .. 'Fiscally, the state is near bankrupt. So do I want to take this money and cause chaos and pandemonium? No,' says Mr. [J. Clark] Kelso. 'But I have a court order here, and I must move forward.' ... In 2002, a federal judge in the U.S. District Court for the Northern District of California deemed the state's prison health-care system so bad that it violated the constitutional prohibition of cruel and unsual punishment. The judge, Thelton Henderson, ordered the state to improve the system", WSJ, 21 July 2008.

Consider the implications for California municipal bonds.

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