California nears insolvency amid budget woes - gov

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Source: Reuters

By Jim Christie

SAN FRANCISCO, Jan 15 (Reuters) - California Gov. Arnold Schwarzenegger said on Thursday the state "faces insolvency within weeks" and that he will put new policies on hold until there is a deal with lawmakers to close the budget gap, which will top $40 billion over the current and next fiscal year.

"It doesn't make any sense to talk about education, infrastructure, water, health care reform and all these things when we have this huge budget deficit," Schwarzenegger said in his annual state of the state speech.

The speech stood in sharp contrast to his previous state of the state addresses. It was short, blunt and focused on the urgent task of balancing the books of the most populous U.S. state and nation's biggest issuer of public debt.

In prior years he used the address to propose ambitious plans to overhaul the state government and to call on lawmakers to join him in rallying voter support for significant spending to improve and expand California's public works.

But now California faces a recession-driven decline in revenues pushing its current budget into a deep deficit and opening another massive shortfall in its next budget.

The housing slump's ripple effects have finally spread across California's economy and the mortgage market turmoil that put Wall Street on its heels is slashing into the state's revenues. California relies heavily on personal income taxes so its coffers swell in good times and run thin in lean times.

Read more: http://uk.reuters.com/article/marketsNewsUS/idUKN1553428120090115

[Ian David]

1. What an economic girlie man! n/t

[ronnykmarshall]

2. and Davis was recalled for ????????

[ananda]

3. Aint karma a bitch, says Grey Davis.

nt

[DJ13]

4. If Arnie was a Dem the GOP would have already begun a recall

Funny how that works.

[Chisox08]

5. Stop being a girlie man Arnold

It's only a mental budget deficit

[xchrom]

6. hey ahnuld

:nopity:

[struggle4progress]

7. Calif. May Issue Tax-Refund IOUs (AP)

Associated Press
Thursday, January 15, 2009; Page A09

SACRAMENTO, Jan. 14 -- California might delay tax refunds to more than 10 million taxpayers or even issue IOUs because the state is running out of money, authorities warned Wednesday.

It would be the second time the state has issued IOUs on tax refunds since the Great Depression, but the first time it would be felt widely because the delay comes in the middle of tax season.

The most populous state in the nation has a $41.6 billion deficit, and finance officials project the state will run out of cash in late February. The state controller will make a decision about the refunds by Feb. 1.

For Cheryl Hubbard, 62, a home care worker from Pasadena, a missing tax refund would throw another wrench in her already tight budget. "If we can't get our tax refunds, we can't pay our bills," said Hubbard, who is planning to use her refund this year to fix her car ...

http://www.washingtonpost.com/wp-dyn/content/article/2009/01/15/AR2009011500005.html?wprss=rss_nation

[bemildred]

8. Epic fail. nt

[bottomtheweaver]

9. He's been crying poorhouse since he got, er, elected.

They give him his poorhouse script, he reads it, it gets reported. Then they give him his "exciting ideas" script, the one where he talks about lowering taxes and closing schools and universities and did I mention lowering taxes, he reads it, it gets reported. And so on.

[XemaSab]

10. That's another fool who needs a shoe thrown at him

:banghead:

[damntexdem]

11. Uh oh, watch the Guv try to raid the retirement accounts!

I worry as a recipient of two of them.