Posted on 10/23/2005 8:11:31 PM PDT by calcowgirl
California boasts one of the world's largest economies, but the state's reputation is tarnished by a tax system that is often volatile, by a budget process that tends toward gridlock and by a habit of borrowing when it can't balance the books.
All of which helps explain why California has the lowest bond rating of the 50 states -- a dubious distinction it might soon surrender to Louisiana, which can blame its predicament on natural -- not politically inflicted -- causes.
"Five years ago, California had about $26 billion of tax-supported debt," said Richard Raphael, public finance expert at Fitch Ratings, a New York firm that evaluates the credit risks of bonds. "Today, it's about $54 billion."
As voters prepare to go to the polls in a special election billed by supporters as the next step toward restoring fiscal discipline, the experts who rate state debt for Fitch, Standard & Poor's and Moody's Investors Service tell similar tales of how California sank to the bottom of the borrowing barrel.
All three rating agencies have begun to upgrade the state's credit score. They say Gov. Arnold Schwarzenegger and the Democratic-controlled state Legislature have taken baby steps toward fiscal reform.
Even so, they say recent history shows how the state tax code, coupled with the state's fractious politics, has turned California politicians into debtoholics.
"They're going to have to come to terms and either lower spending or raise taxes, and they haven't done it,'' said S&P California analyst David Hitchcock.
"That's why it's the lowest-rated state."
(snip)
As Standard & Poor's noted in January, "through 2005, nearly $30 billion of debt will have been issued to help cover state operating expenditures."
(Excerpt) Read more at sfgate.com ...
"Five years ago, California had about $26 billion of tax-supported debt," said Richard Raphael, public finance expert at Fitch Ratings, a New York firm that evaluates the credit risks of bonds. "Today, it's about $54 billion."
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Unfortunately, by the end of the decade , it'll likely have close to 100 billion, if not more
And this was championed by none other than our RINO grubinator.
We're rich I tell ya, Rich!
We'll just tax meathead and his compadres in them thar golden hills of hollyweed, they'll understand, It's for the children, yaknow.
Don't forget the Economic Recovery Bonds, the Pension bonds, the Tribal Gaming bonds... and the additional bonds they want authorized via Prop 76. They seem to think they have unlimited credit cards.
Yeah--but whose children? American citizens? I think not.
Yep.
Reform, rebuild ... repay - Schwarzenegger's vision involves trips to the bank.(snip)
Schwarzenegger, he said, has told his advisers that they shouldn't blink at talk of a $9 billion or $10 billion bond when "we should be talking about $60 billion or $70 billion."
Wall Street financiers, amongst others, must be drooling at the thought.
They even have bonds to fund agriculture, called Berry Bonds. < /rimshot>
The deeper the shade of blue, the more fiscally incompetent and corrupt the state's financial management.
Blue... Red... they are all flourishing.
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