Fiscal Armageddon In California

May 1, 2009 at 10:55 am  ·  Category: California, Government, Macro Economics, Politics

If the ballot measures fail and the recession does continue unabated into 2010, the budget gap could widen again into the $20 billion range.  But the governor and legislative leaders may have fired all their political bullets in February, leaving them with few options beyond wholesale spending cuts in education, health and welfare services and even prisons to close the gap.

– Dan Walters, “Foundation of budget deteriorates”, The Sacramento Bee, April 12

This is an immense mess, partly caused by the recession, partly caused by years of fiscal irresponsibility.  And it may be the day of reckoning that Capitol politicians had long avoided, compounded by the obvious anger of voters.

Wholesale slaughter of state spending may be their only option.  This is a pivotal point in California political history, a fiscal Armageddon.

– Dan Walters, “What’s Plan B if five ballot measures fail?”, The Sacramento Bee, May 1

California state government is in a state of fiscal emergency.  State income tax revenues for the fiscal year beginning in July 2008 through April 29, 2009 are $9 billion less than a year ago ($37.5 billion vs. $46.5 billion – a 19% decrease).

Income tax revenues account for about half of the state government’s revenues and about 25% of income tax revenues arrive in April.  But Dale Kasler of The Sacramento Bee reported this morning (“No april tax bonanza for state”, The Sacramento Bee, May 1) that those hoping for a strong April are sorely disappointed as income tax revenues through Wednesday (April 29) have come in 43% below last year’s level.

ca-april-income-tax-revenues

State politicians were hoping for some budget reprieve from the passage of five propositions (1A-1E) in the upcoming Special Election on May 19th.  But polls strongly suggest these initiatives won’t pass.

Issuing debt is very difficult for the state right now because of financial market conditions and downgrades by ratings agencies.

They better cut costs and they better do it quick.

Posted by Greg Feirman  ·  Trackback URL  ·  Link
 
No Responses to “Fiscal Armageddon In California”
  • Proposition 1A through 1F of the propositions in the upcoming special election consider a NO vote, because it’s downright fraud. Remember you are paying for prison cells, education health care and other forced Federal mandates for illegal alien families. Since proposition 187 those people in Sacramento have stuck it to you. Welfare – $1.8 to $3 billion per year is lost due to fraud in the Food Stamps, Medi-Cal and Cal WORKS programs. Remove illegal immigrants and felons from Cal WORKS. More than 42 percent of California’s taxpayer-funded, Medi-Cal births are to illegal immigrant mothers. Every month, $37 million in welfare and food stamps, health care goes to illegal alien families in Los Angeles county. A blockbuster example of fraud is the Earned Income Tax Credit (EITC). Economics writer Ed Rubenstein’s new report, “The Earned Income Tax Credit and Illegal Immigration: A Study in Fraud, Abuse, and Liberal Activism,” The author says immigrants collected about $12 billion from the EITC last year, the majority not paying a cent towards it. Robert Rector of the Heritage Foundation found high school-dropouts-who headed households pay an average of $9,700 a year in taxes but collect an average of $32,138 a year in benefits. All this money in real dollars is procured from unaware taxpayers. Surf NUMBERSUSA for the truth not the propaganda you expect for the open border zealots.

    Brittancus  ·  May 1, 2009 at 2:36 pm  ·  Permalink
  • Let Kalifornica fail. They brought it upon themselves with their silly liberal policies.

    The biggest problem is that those liberals see what a sh*thole they’ve made of their once fine state, an they leave, taking their silly liberal ideas with them to another venue.

    Jimbo  ·  Jun 8, 2009 at 6:04 am  ·  Permalink

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