California shortfall $21.3 billion if measures fail

[Niels Bohr 72]

Tue May 12, 2009 6:09am EDT SACRAMENTO, California (Reuters) - California faces a state budget shortfall of $21.3 billion if voters reject budget-related ballot measures during the state's May 19 election, Gov. Arnold Schwarzenegger said on Monday.

In a letter to top lawmakers, Schwarzenegger said that even if voters approve the ballot measures, the government of the most populous U.S. state will face a budget deficit of $15.4 billion.

"Absent swift action, the state will be facing a very serious cash crisis," Schwarzenegger said in his letter, provided by email to Reuters.

"We now face the leanest of times," Schwarzenegger said. "California, for the first time since 1938, faces a decline in personal income."

Recession has hit California hard, and state leaders expected the state's budget woes would carry over into its next fiscal year, which begins in July, even though they closed a budget shortfall of more than $41.6 billion in February.

"Since that time, the severe economic downturn that California, like the rest of the nation, has been facing has worsened substantially," Schwarzenegger said. "These changes in the state's economic and revenue pictures have caused a significant new budget problem to emerge."

A Schwarzenegger aide said the governor will release two budgets plan on May 14, one for balancing the state's books should voters approve the ballot measures and the other in case they reject the measures.

(Reporting by Jim Christie; Editing by Gary Hill)

[Trumplestiltskin 5,791]

Most of our relatives live in CA. Not a good place to be right now.

[The_Dude 1,142]

Most of our relatives live in CA. Not a good place to be right now.

Oh? I think you are grossly mistaken there. It is a great place to live, despite the Governator.

The governator is planning, whether the measures pass or not to begin drawing funds from local government coffers. This will generally be in the form of a larget take of license fees, property taxes, and registration taxes. Gotta love the state republicans and their plans for a smaller, less omnipresent government.

[Peikko 1,575]

Don't dis the Governator!

Yeah, despite everything I love living in CA.

[Trumplestiltskin 5,791]

Most of our relatives live in CA. Not a good place to be right now.

Oh? I think you are grossly mistaken there. It is a great place to live, despite the Governator.

The governator is planning, whether the measures pass or not to begin drawing funds from local government coffers. This will generally be in the form of a larget take of license fees, property taxes, and registration taxes. Gotta love the state republicans and their plans for a smaller, less omnipresent government.

I know - I lived there for 2 years...

I'm talking about the economic situation - everyone I know over there has either lost their job, or has had to take a paycut through reduced hours. As it was wages on that side of the country aren't in line with the cost living (which mind you, is cheaper than it is over here in NJ/NY).

Edited May 12, 2009 by Private Pike

[Peikko 1,575]

Most of our relatives live in CA. Not a good place to be right now.

Oh? I think you are grossly mistaken there. It is a great place to live, despite the Governator.

The governator is planning, whether the measures pass or not to begin drawing funds from local government coffers. This will generally be in the form of a larget take of license fees, property taxes, and registration taxes. Gotta love the state republicans and their plans for a smaller, less omnipresent government.

I know - I lived there for 2 years...

I'm talking about the economic situation - everyone I know over there has either lost their job, or has had to take a paycut through reduced hours.

Edited May 12, 2009 by Madame Cleo

[Trumplestiltskin 5,791]

We probably don't know the same people

[Peikko 1,575]

I meant me - but of course, you are correct there are people in that position.

[The_Dude 1,142]

I know several people who have received work furloughs, but none yet who have lost their jobs outright.

Doesn't anyone find it a bit scary, or at least hypocritical of a republican governor to supercede the authority of the voters and local governments to take revenues from local governments?

[Trumplestiltskin 5,791]

I know several people who have received work furloughs, but none yet who have lost their jobs outright.

Doesn't anyone find it a bit scary, or at least hypocritical of a republican governor to supercede the authority of the voters and local governments to take revenues from local governments?

If the deficit is that large - all they can do is cut spending or slash budgets (like education).

[Peikko 1,575]

I know several people who have received work furloughs, but none yet who have lost their jobs outright.

Doesn't anyone find it a bit scary, or at least hypocritical of a republican governor to supercede the authority of the voters and local governments to take revenues from local governments?

Well, I don't know all the ins and outs, but I get the impression that the Governator is on a different wave length to the reps in Sacremento. I believe that his mission is to reconcile the budget crisis come what may, which is actually quite a reasonable and responsible mission. However, if there are precendence set that could prove well, dodgy if used for more subversive reasons then no, it should not happen.

[Trumplestiltskin 5,791]

Didn't he cut thousands of government workers a few months back? And put most of the rest on reduced hours?

[Peikko 1,575]

Yes, he did - but as I said, his main aim is to close the budget deficit gap. The reps in Sacramento will not allow any tax increases of any sort so what else can he do? Nothing is not really an option, is it?

[The_Dude 1,142]

The state republicans block anything that introduces any new tax, they do however wholeheartedly support tacking on extra fees onto licenses and registrations. A rose is a rose by any other name

[Peikko 1,575]

I don't think those are enough to make a dent in the deficit though - they need a lot of cash to tide over the economic crisis and a secure plan to prevent the need for these types of measures in the future - who's offering anything like that on the hill?