Free Republic

Prop 19 went down in smoke, but the world's fifth biggest economy passed three propositions that address its yearly budget crisis. One makes it better and two make it worse, according to Bond Buyer. First, California voters passed Prop 25 to allow the legislature to pass a state budget without a 2/3 supermajority. This was the main obstacle to passing a budget this year for over 100 days past due. Arkansas and Rhode Island are the only states that still require a supermajority to pass the budget, and Rhode Island is another fiscal disaster. Second, California voters passed Prop 26...

Could someone please pass the toilet paper, perhaps from another state or something? California’s epic budget battle has really taken a toll, maybe even greater than first thought. California State Parks are going to have to go without toilet paper. So that means that you will have to go without toilet paper if you’re visiting one of the more rural state parks in the golden state. California’s budget battle has been going on for nearly 3 months with neither side willing to give an inch. Forget about all the IOU’s and not being able to pay vendors for services rendered...

Struggling through its worst-ever budget crisis, Chicago has suffered the first in what could be a series of body blows: a downgrade in the all-important bond-rating that determines city borrowing costs. Citing a record, $654.7 million budget shortfall and Mayor Daley’s “accelerated use of reserves to balance operations,” Fitch Ratings has reduced its rating on $6.8 billion in outstanding general obligation bonds from AA-plus to AA. The ratings outlook is negative. the ticking time bomb created by $14.57 billion in city pension liabilities.

The California Public Employees’ Retirement System is putting an administrative hold on the pensions of the former executives of the city of Bell, whose outrageous pay forced them to resign ... Bell’s high salaries and pension benefits spurred an investigation by California Attorney General Jerry Brown and CalPERS ... After the salaries were printed in the Los Angeles Times, public outcry forced the three of them to resign within a week. But the three are eligible for substantial pension benefits from CalPERS

By Renee Batti Almanac News Editor Two employee unions and a resident filed a lawsuit June 23 against the city of Menlo Park and a resident involved in the effort to place an initiative on the November ballot that would alter pension benefits for new employees. The unions and Menlo Park resident Katy Rose, who is also a plaintiff in the lawsuit, held a press conference at June 23 at the Menlo Park Civic Center to announce the legal challenge; the lawsuit asserts that the pension reform initiative violates the California Constitution, and asks that it be kept off the...

Los Angeles Mayor Antonio Villaraigosa called Tuesday for all city agencies -- except for police, other public safety and revenue-generating departments -- to close for two days a week starting April 12 because of the city's continuing budget crisis. "We have to act, and we have to act quickly," Villaraigosa said at a press conference. The mayor said he would direct the city's chief administrative officer to immediately begin planning to set the shutdown in motion

When historians recount the momentous events of recent weeks, they will note a curious coincidence. On March 15, Moody's Investors Service -- the bond rating agency -- published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama's health-care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook. Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings....

More than 60,000 state employees may not be getting merit pay raises in the fiscal year that begins July 1. The announcement came today in the form of a notice for a special meeting of the commission Friday at 9 a.m. to consider a proposal to suspend the authority for state agencies to grant merit pay raises in a budget year when money is scarce. The meeting will be held in the Claiborne Building's Lousiana Purchase Room in Baton Rouge. The proposed cancellation of the merit pay raises comes after Gov. Bobby Jindal last week vetoed a State Civil Service...

An unexpected drop in state tax collections has created a mid-year budget deficit that could be as high as $400 million, adding dark new clouds to the state's bleak financial forecast as lawmakers prepare for the start of their annual session in two weeks. The news, delivered to Gov. Bobby Jindal's administration late last week by state economists, comes less than three months after the governor cut $248 million from the 2009-10 budget to adjust for shrinking state tax collections. Those cuts have led to hundreds of layoffs in state government and fell particularly hard on health care and higher...

Reporting from Sacramento - Even as the state grappled with a budget crisis last year, bureaucrats spent nearly $45 million on new vehicles, almost $30 million on new furniture and more than $2 million on off-site meetings and conferences, a legislative panel has found. The expenditures were outlined in a report released Monday by the Assembly Committee on Accountability and Administrative Review, which plans to call on state agency managers to explain their spending at a hearing Wednesday. "These expenses came despite an executive order from the governor last year for each state agency to cut costs and eliminate vehicle...

When President Barack Obama last week proposed a freeze on some federal spending, Sen. George LeMieux dismissed it as too little, too late. “Our nation is more than $12 trillion in debt,” he said. “Shame on us if we don’t address the problem head on.” But when Obama proposed a big cut in the NASA budget Monday, the Republican from Florida — home to the Kennedy Space Center — said the president should look elsewhere for savings. “I don’t think that makes any sense,” LeMieux said of Obama’s plan. He isn’t the only fiscal hawk to squawk.

During last summer's fiscal crisis, Gov. Arnold Schwarzenegger borrowed the title of a film classic to describe California's budget, saying it contained "the good, the bad and the ugly." He was referring to welfare reforms and the streamlining of state boards that he was able to broker, along with deep spending cuts for schools, health care programs for the poor and AIDS-prevention efforts. All that's left in 2010 is the ugly. The nation's most populous state faces a nearly $21 billion shortfall over the next 18 months, a deficit that comes after years of making deep cuts in core state...

SAN FRANCISCO (Reuters) - California Governor Arnold Schwarzenegger signed a package of bills on Tuesday to balance the state's budget, which should allow the state to stop issuing IOUs instead of paying bills and to prepare for a crucial sale of short-term debt. After weeks of negotiations, the Republican governor and top lawmakers in the Democratic-led legislature early last week agreed to several measures to close the state's massive budget deficit of more than $24 billion. On Friday, the legislature passed many of the measures to close most of the gap but left it to Schwarzenegger to use line-item cuts...

Gov. Arnold Schwarzenegger signed a package of budget bills Tuesday he said contained "the good, the bad and the ugly," including no new tax increases and deep cuts in education and health care. He said he was forced to make additional cuts in parks and child welfare services because lawmakers sent him a package that was $156 million in the red. "We are not out of the troubled waters yet," he said."We are ready if our revenues drop further to make the necessary cuts to again live within our means." Line items totaled $656 million, including cuts in the Office...

Rich Pedroncelli / Associated Press Schwarzenegger discusses the $85-billion revised state budget before signing it at the Capitol today. Calling the budget the 'good, the bad and the ugly,' the governor reduces funding to programs for children's welfare and healthcare, the elderly, and AIDS treatment and prevention.Reporting from Sacramento -- Gov. Arnold Schwarzenegger today signed a budget plan approved by lawmakers to close the state's monumental deficit, using his veto power to impose nearly $500 million in additional cuts. The new reductions will affect child welfare and children's healthcare, the elderly, state parks, and AIDS treatment and prevention beyond...

Monday’s agreement between Arnold Schwarzenegger, the governor of California, and state legislators seemed to promise a temporary resolution to an ongoing budget crisis. But before legislators had even had a chance to vote on it, Californians were indulging in that peculiar mix of sanctimony and surrealism which marks almost all political discourse in the state. “What about the children?” ran the headline over the letters section of the San Francisco Chronicle, as if the important divide in the state’s politics were between those who “care” and those who do not. Caring has nothing to do with it. California’s problems are...

California IOUs can be considered securities, SEC says Agency guidance helps create a secondary market for IOUs, helping with prices By Ronald D. Orol, MarketWatch WASHINGTON (MarketWatch) -- The Securities and Exchange Commission late Thursday issued guidance identifying the IOUs being issued by California as "securities," rather than just obligations of the economically troubled state. The Golden State issued the IOUs last week to conserve cash and pay off bondholders. "The staff of the SEC has expressed its belief that California's recently issued IOUs are 'securities' under federal securities law. As such, holders of these IOUs and those who may...

People who get California IOUs People California pays in cash Grants to aged, blind or disabled persons University of California People needing temporary assistance for basic family needs Public Employees’ Retirement System People in drug prevention, treatment, and recovery services Legislators, legislative employees, and appointees Persons with developmental disablities Judges People in mental health treatment Department of Corrections Small Business Vendors Health Care Services payments to Institutional Providers

Indiana is one of five states -- along with Arizona, California, Mississippi and Pennsylvania -- bracing for possible shutdowns this week as time runs out for lawmakers to close billion-dollar gaps in their fiscal 2010 budgets. Of the 46 states whose fiscal year ends today, 32 did not have budgets passed and approved by their governors as of Monday afternoon, according to the National Conference of State Legislatures. Although the majority of those are expected to pass eleventh-hour budgets, the fiscal futures of a handful remain uncertain, said Todd Haggerty, an NCSL research analyst.

LOS ANGELES (Reuters) - As California teeters on the brink of a financial meltdown, big interest groups led by public employee unions are complicating the picture, with chances slim of near-term reform. Little gets done in state and local politics across California without the involvement of unions for teachers, nurses, firefighters and state employees. "The Democratic state party is really just an extension of the unions," said Tony Quinn, co-editor of the California Target Book, a non-partisan analysis of the state legislature and Congressional elections. "The unions now control the legislature and they helped bring about the situation in which...