Posted on 01/01/2009 10:26:37 AM PST by NormsRevenge
SACRAMENTO Gov. Arnold Schwarzenegger's staff Wednesday released his most detailed plan yet to tackle the state's staggering budget deficit, calling for deep cuts to state services, hefty tax increases and a large new round of borrowing to close a projected $41.6 billion shortfall through mid-2010.
While little of the proposal was new, it included some striking elements, such as cutting billions of dollars from public school funding and slashing the deduction state taxpayers can claim for their dependents. The plan also arrived a day after the state controller warned tax refunds might have to be paid with IOUs in the spring because California is so short of cash.
In years past, the governor has unveiled his annual budget plan in highly choreographed events before a gaggle of TV cameras. This time he remained on vacation in Sun Valley, Idaho, leaving his finance aides to present the plan on New Year's Eve.
The plan, the governor's third in as many months, has little chance of being adopted and serves more as a statement of his fiscal priorities. It would cut $5 billion from funding for public schools over the next 18 months while imposing a temporary 1.5-cent sales tax increase. Spending on welfare, health care for the poor and aid for the aged, blind and disabled would be cut dramatically.
Despite forswearing more borrowing, Schwarzenegger proposes tapping Wall Street for a nearly $5 billion loan and pledging future lottery proceeds in exchange for an additional $5 billion. But the Wall Street loan may be iffy at best, given the frozen national credit markets and the state's shaky finances, while the lottery plan would have to be approved by voters.
(Excerpt) Read more at mercurynews.com ...
deep cuts, large tax hikes, more borrowing
ummm .. aRnie stew
Related document
Proposed 2009-10 California state budget (PDF)http://www.mercurynews.com/extra/ci_11345969
Good gracious! Does this mean the Californian government will have to *gasp* live within its means? This is a dangerous precedent and may lead to unfortunate consequences like a return to common sense and good government.
Hope they’re not counting too much on borrowing, because lenders are both pretty tapped out, and the odds of a California bond default are high.
Pretty soon, the old rule will apply to everyone: “You can only borrow money if you don’t need it.”
And that’s the way it should be.
It is of interest that the date CA will default is now 1 FEB - a month earlier than the last prediction.
Only is California would “borrowing” be part of “balancing” the budget.
After the standard political theater by our shobiz governor, Californians will again by waltzed into huge tax increases and interest payments on massive state debt. You CAN fool most of the people most of the time, and not just in CA, FRiends.
Somebody needs to inform Scwartzenkennedy that Wall Street is BROKE and is currently being bailed out by US taxpayers with newly created money.
California and the FedGov have the same problem -- TOO MUCH F*ING SPENDING!
Well it’s interesting. A lot of RINOs have been bled out of the Republican Party in California. The same tricks Pelosi has used nationally, demonization, lies, propaganda, name calling. And of course gerrymandering.
The ones who are left are pretty hard core. The state requires 2/3 votes for tax increases, and so far the GOP has been hanging tough on “no tax increase”.
The Donks are trying to just ignore the law. Who knows with the corruption in Cali’s courts and the DOJ refusing to enforce the law (thanks Jerry Brown you twit) maybe they CAN just ignore the law.
If not, and if the GOP holds it could be all cuts to balance the budget. That would be a beautiful thing.
Of, if the legislature won’t pass the cuts then DEFAULT, scripts, etc.
Either way the GOP is doing great work here to date. Let’s not characterize this as failure yet!
An obvious recipe for disaster.
This may be a stupid question, but with retailers losing their shirts this past Holiday Shopping Season, won’t increasing the sales tax by 150 basis points only cause further contraction in the retail sector which will result in further lost jobs and in the end further erosion of tax revenue not expansion?
very sobering (and long) read, here: The City Where the Sirens Never Sleep. It's also worth it to then follow the link and finish the article at the source. The fruits of 50 years of RAT rule.
Issuing revenue bonds against FUTURE LOTTERY revenue? Unfreaking believable.
The past few months my wife and I have started seriously discussing leaving this insane state. This could be the last straw.
It’s beyond amazing to see this in action.
How can even RHINO Arnie be so dam DUMB?
Nah, nobody would ever purchase retail items over the Internet. Wouldn’t occur to us.
As Detroit goes, so does CA ...
That reminds me (in history) of the Nazi juggernaut on the horizon and the Jews that were smart enough to know what was happening got out while they could legally do so. Meanwhile, many other Jews thought it wouldn't be "all that bad".
Moral: get out at the first opportune time, surely you don't believe that now with Obammy as POTUS, it's going to get better do you?
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