CA: State takes another debt rating hit

SFGate.com ^ | 8/5/03 | Christian Berthelsen, SF Chronicle

[NormsRevenge]

Sacramento -- A second major Wall Street rating agency downgraded California's credit on Monday, but not as severely as the hit the state took two weeks ago.

Moody's dropped its rating on California's general obligation debt a single notch, from A2 to A3, keeping the rating in the uppermost tier. Standard & Poors downgraded California three notches on July 24, dropping it into the "B" category.

[NormsRevenge]

Ping

[ken5050]

Makes the cost of the recall look like a bargain..oops..there goes another Dem talking point..shot down....

[Becki]

With this, plus the businesses moving out of California, they are going to go under. Then the rest of the country will have to pick up the tab for them.

I don't like that idea one bit.

Becki

[Ernest_at_the_Beach]

calgov2002:

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[The Old Hoosier]

There's one way to take advantage, though: buy Calif. bonds while the rates are high!

[COBOL2Java]

This just in: California has gone from Junk Bond Status to Game Show Status!

[Carry_Okie]

With this, plus the businesses moving out of California, they are going to go under. Then the rest of the country will have to pick up the tab for them.

I really tire of this kind of ignorance. Californians pay some of the highest Federal income taxes in the nation. If the net outflow of revenue from California to the Federal Treasury was halted, and California was forced to "stand on its own," the State budget would be showing a surplus.

[Carry_Okie]

With this, plus the businesses moving out of California, they are going to go under. Then the rest of the country will have to pick up the tab for them.

I really tire of this kind of ignorance. Californians pay some of the highest Federal income taxes in the nation. If the net outflow of revenue from California to the Federal Treasury was halted, and California was forced to "stand on its own," the State budget would be showing a surplus.

[Carry_Okie]

With this, plus the businesses moving out of California, they are going to go under. Then the rest of the country will have to pick up the tab for them.

I really tire of this kind of ignorance. Californians pay some of the highest Federal income taxes in the nation. If the net outflow of revenue from California to the Federal Treasury was halted, and California was forced to "stand on its own," the State budget would be showing a surplus.

[Lancey Howard]

Peace also said the 16,000 workers the state will have to lay off as part of the budget represented 7.7 percent of the its workforce.

Are these the 16,000 "workers" who are shuffled into the phantom positions which the state government keeps open specifically for this bogus "lay off" contingency?

[familyofman]

Uncertainty breads higher risk to bondholders. The recall & current fiscal mess can only be described as turmoil. The state legislature & govenor did nothing to correct the current budget mess - except put it off until some later date (are they taking cues from DC).

[Carry_Okie]

Sorry for the triple hit. After sending it and waiting for a response, I had gone back to the thread, refreshed it and the post did not appear, so I resent it. I frankly didn't know what happened.

[Lancey Howard]

If the net outflow of revenue from California to the Federal Treasury was halted, and California was forced to "stand on its own," the State budget would be showing a surplus.

Uh, welcome to earth.
Would California then raise its own Army, Navy, Air Force, and Marines, take back its federal prisoners, fund its own FBI and CIA, its own Food and Drug Administration, etc., etc., etc.?

EVERY state would show a "surplus" if it kept all the taxes its residents normally send to the feds but still got all the federal functions for "free".

[Carry_Okie]

Um, net cash flow to the Federal Treasury, is NETcash flow out of California. That net surplus funds more military protection, FDA, etc., than the State receives in Federal benefit. Californians pay MORE than their "fair share" of Federal revenue because salaries are so high here that it pushes a larger fraction of its citizens into higher tax brackets.

Got it?

[Lancey Howard]

That net surplus funds more military protection, FDA, etc., than the State receives in Federal benefit.

And what is the dollar value of the "benefit" California will receive from cheap Iraqi oil? (You can round to the nearest billion.) Take your time.

[Becki]

I really tire of this kind of ignorance. Californians pay some of the highest Federal income taxes in the nation.

Please forgive my ignorance. It is not intentional.

But the article is talking about businesses leaving California, and taking their jobs with them. That means that the Federal Income Tax money, as and all other income tax, leave the state as well. Given that Federal rates are the same in California as in all other states, a reduction in the number of jobs in the state also means a reduction of the Federal taxes paid in by the state.

It also means that all other income taxes, state and local, as well as sales tax revenues will be reduced. If enough jobs leave the state, at some point the outflow will be less than the inflow. And at what point will the state be unable to fund current programs? That is what I was getting at.

If the net outflow of revenue from California to the Federal Treasury was halted, and California was forced to "stand on its own," the State budget would be showing a surplus.

Same here in Michigan. We pay out more than we get back in Federal money. But if enough jobs left here, we would be in the same trouble. At some point would the rest of the country start picking up the bill?

Becki

[Carry_Okie]

Considering that there is no home heating and virtually no electrical production from fuel oil here, less than elsewhere. Nice try covering your bogus reasoning. Just because the government here is screwed up doesn't mean we haven't been pulling more than our weight for decades.

[Carry_Okie]

Sorry, but that last post was to Lancey Howard. I'm in a real rush getting out to do a speech.