Posted on 10/02/2008 11:34:37 PM PDT by BurbankKarl
California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks.
The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent.
The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch. If the state is unable to access the cash, administration officials say, payments to schools and other government entities could quickly be suspended and state employees could be laid off.
Plans by several state and local governments to borrow in recent days have been upended by the credit freeze. New Mexico was forced to put off a $500-million bond sale, Massachusetts had to pull the plug halfway into a $400-million offering, and Maine is considering canceling road projects that were to be funded with bonds.
California finance experts say they know of no time in recent history when the state has sought an emergency loan of this magnitude from the federal government. The only other such rescue was in 1975, they said, when the federal government lent New York City money to avoid bankruptcy.
"Absent a clear resolution to this financial crisis," Schwarzenegger wrote in a letter Thursday evening e-mailed to Paulson, "California and other states may be unable to obtain the necessary level of financing to maintain government operations and may be forced to turn to the federal treasury for short-term financing."
(Excerpt) Read more at latimes.com ...
I guess papering over the budget deficit this year and pushing it into next year was not a good idea.
This is going to be big news....more than all the business shutting down and laying off already.
Can’t be. We all know that illegal immigrants contribute far more to the economy than what they produe. With all the millions of illegal California should be souring. So it’s impossible for the state to be in trouble because they have so many immigrants.
7B, a mere bag of shells these days.
A lot of illegals have gone home...
It is sad that a billion bucks seems like nothing today is’nt it?
These people have lost their minds! Why is it my fault that California government cannot function? Why is it my fault that people bought homes they could not afford? Why is it my fault our automobile companies cannot stay profitable?
Why is it the fault of my 1 and 3 year old children who can’t vote but are being asked to pay for all of the failed policies of prior generations?
And yet there's at least three new state bond proposals on the November ballot!
There is a Measure R in LA County....The LA MTA mailed a brochure to every USPS customer in the county! I think it adds another half cent to the sales tax for transit.
But we already have a transit tax...and the State monies have been diverted to take care of our South of the Border guests.
Ask Wall Street for it, Arnie, I hear they’re coming into BILLIONS soon.
When my dad sold his Orange grove and spray rig business and moved to a farm in Oklahoma we missed the good old days of living in the central valleys.
I came back to California in 2006 from South America thinking things were great.
I still have not fully figured out everything that is wrong but it does not take a rocket scientist to know that California voters have been on a buying binge for years.
Years of inane...no down right stoopid, laws have killed the Golden Goose.
When I first moved to the beach in San Diego my neighbor said why did you move here.
He stated that thing's were about to crater and the liberals just could not accept the fact that they had damaged California to a point of no return.
Just my lowly opinion.
Truthguy. Noticing myself how the LSM, the POTUS candidates and the VP candidates are avoiding this subject completely. The Libs don’t won’t to discuss the financial implosion of their cultural mecca. A prime example of failed social engineering policies and its associated costs.
Californians live in a physical paradise and vote themselves all kind of benefits, and look down their noses at the rest of the country. Now WE are supposed to bail them out?
Maybe a few have left here, but, a lot of illegals have moved to NC to be supported by the Dim legislature and gov here. Crimes being reported perpetuated by illegal Hispanics in my area is continuing to skyrocket.
Think utility workers(water and sewer),,,
Lay them off and watch what happens...:0/
Is this because of greedy CEO’s too? /sarc
Ping
What’s the saying....Among the states, California is the leader. You know, air pollution regs, designer gasoline blends, coaxial fuel-vapor-recovery hoses on gas pumps; tree hugging, whale appreciation, mantras, and prayer circles.
I am sure Hank wants to set a fine precedent here. Then there would only be 56 more states to bail out.
The State can cut $7-billion from its annual budget and live within its means.
Have to cut out road maintanence? The roads are in lousy shape already. They can revert to dirt.
Have to cut out welfare benefits? Too bad. Can't afford it.
Have to close down the universities? Too bad. Close 'em down.
Can't afford police protection? The citizens will have to buy guns and protect themselves.
Bail out California? Don't make me laugh!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.