This post has been added to the… California In Transition- Must read Threads! 
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Posted on 11/15/2003 6:24:40 PM PST by Brian S
Reuters, 11.15.03, 8:17 PM ET
SAN FRANCISCO, Nov 15 (Reuters) - Just two days before Arnold Schwarzenegger is scheduled to be sworn in as governor of California, his chief budget advisor said on Saturday the new administration would face a "staggering" deficit that will grow to $62 billion by 2006-07 if left unchecked.
The figures, released by finance director-designate Donna Arduin, portray a state in financial disarray. The assessment follows a report on Friday by legislative analyst Elizabeth Hill that showed a similarly dire situation.
"We knew that this was going to be bad, but this is staggering," said Arduin, who earned a reputation for cost-cutting while serving as Florida's budget director. "Time is running out to fix the problem."
The analysis begins with a deficit of $10.6 billion in 2002-03 that grows to $14.9 billion in 2003-04. The gap nearly doubles to $28.9 billion in 2004-05 before ballooning to $45.4 billion in 2005-06. It ends at $62 billion in 2006-07.
Arduin, who also worked on budgets in New York and Michigan, blamed the problem on runaway spending.
"Obviously, if you continue to spend more than you are taking in, your structural gap continues," she said in a conference call announcing the findings.
Arduin, who began examining the budget just two days after Schwarzenegger's stunning election in a special poll on Oct. 7, prepared the analysis assuming no changes to current law, no deficit borrowing and estimated revenues based on moderate economic growth.
The review also maintains Schwarzenegger's pledge to roll back a planned tripling of the state's vehicle licensing fee, a controversial tax the Republican candidate used to galvanize unhappiness with the administration of Democrat Gray Davis.
Schwarzenegger's incoming administration will inherit $24.8 billion in debt, according to Arduin's analysis. That figure includes $10.6 billion in deficit accumulated through 2002-03, $4.3 billion in operating deficit for 2003-04 and $9.9 billion from prior budget decisions that have impact reaching up to and beyond 2006-07.
Arduin, who will now complete "a line-by-line review of wasteful spending," said she had already presented the report to Schwarzenegger but declined to characterize his reaction.
The incoming administration has not suggested how Schwarzenegger will address the problem, but some reports have indicated he is considering a bond issue to help fill the gap.
Wonder how much this adviser got paid to come to this conclusion.
CA's problem is that 3/4 of its House and about 2/3 of its Senate are big spending liberals. When Wilson was Governor, there was a modicum of checks and balances on spending, but when Gray Davis took over, it was an unchecked spending orgy.
Schwarzenegger must drive the message home to the thick skulled CA residents that continuing to elect liberals will drive the state into bankruptcy--if it's not close already.
SPENDING CUTS, PROGRAM REDUCTIONS and TAX ROLLBACKS
Does anyone believe they will select choice 2?
Put your homes up for sale and begin looking for new employment in another state. Nevada is a good choice because they do not have a state income tax. Then leave California as soon as you can load your cars and trucks.
Economic news for the state of California will get very bleak very fast. More and more companies are moving their Hdq. out of the state. More and more companies are shipping their jobs over seas or south to Mexico.
Two years from now you may have a very bad time selling your real estate in Mexifornia. Think about my mesage. Think real hard.
I am thinking about it!
Helping my daughter a bit with buying a little Condo in Vegas for her and her teen-agers!
Something tells me the "deficit" would be much more tractable then...
--Boris
Does anyone believe they will select choice 2?
They have to select choice 2.
Arnold promised that he will not raise taxes, and he would have to be a lying scumbag who made a fool out of thousands of freepers to raise taxes. He won't do it.
Arnold is a man of his word, and he will not raise taxes. You can count on that.
Amen to that. That alone would save billions. I've tried to get this point across to CA Senators and Representatives. They ignore it. They are liberals (mostly), yet they go right along with George Bush, who is supposed to be a conservative. Something stinks.
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