"If the world's eighth-largest economy were a company, it would have been on the edge of bankruptcy all year. California's legislature and its governor have already plugged more than $60 billion-worth of holes in the state budget, either by raising taxes or cutting spending. But as soon as one hole is filled, the economy--still bad, even if it no longer technically in recession--digs another. Mac Taylor, the state's non-partisan legislative analyst, now expects to see a deficit of $6.3 billion for the current fiscal year, which ends next June, rising to $14.4 billion next year. ... This means that California's legislature, having already made cuts that exceed the entire budget of many smaller states, must deal with another gap of $21 billion in the coming months. This is larger than, for example, California's entire spending on prisons and higher education combined. ... The problem, as in other states, is tax revenues are coming in below even pessimistic estimates and spending requirements that are rising with welfare claims and other legal requirements, such as Medicaid, the health system for America's poorest. ... The answer, suggests Taylor, must be a mix of additonal cuts and extended temporary taxes, although Republicans, a minority in the legislature large enough to block any tax or budget deal if they wish, are already saying no to more taxes as they prepare for an election year. But whatever the mix, taxing more and spending less is 'the opposite of what we should be doing' in a weak economy, says William Lockyer, California's treasurer, who is a Democrat", Economist, 3 December 2009, link: http://www.economist.com/world/unitedstates/PrinterFriendly.cfm?story_id=15020012.
Good luck Lockyer.
3 comments:
Calling Obama... ring... ring...
California first... then New York... then New Jersey... on and on...
California Average Daily Unemployment borrowing from Nov 3rd to Dec 2nd - $12,515,861.92
California Average Daily Unemployment borrowing from Dec 2nd to Dec 30th - $32,151,768.04
Percentage Increase - 157%
To put that in perspective - Average daily Sales Tax Revenue (30% of California's total tax revenue) has averaged $75 million per day since July 1st 2009.
California percentage of the total borrowing from Nov 3rd to Dec 2nd - 18%
California percentage of the total borrowing from Dec 2nd to Dec 29th - 23%
California began unemployment borrowing on January 27, 2009
Total unemployment borrowing in December as of Dec 29th - $1,090,000,000.00
Total unemployment borrowing as of Dec 30th - $5,961,891,089.28
Accruing at 5% interest! Doesn't show up in the General Fund budgets as it will come directly from unemployment tax on businesses.
California's legislature and its governor have already plugged more than $60 billion-worth of holes in the state budget, either by raising taxes or cutting spending.
And borrowing, borrowing, borrowing. And fudging. Since the problem was only a 2008 problem, all they needed was a short term fix. Oh, it's still ongoing and now the short term borrowing is due? And the fudging didn't actually fix the budget?
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