California finances plummet less than three months after budget passage

[Hannah Bell]

California finance officials have announced that the state has a current budget deficit of $1.1 billion. News of the shortfall comes less than 10 weeks after a balanced budget deal was reached by Republican Governor Arnold Schwarzenegger and the State Legislature...

Loss of tax revenue due to the economic crisis and widespread unemployment and wage reductions is not the only component of the budget deficit. The state’s fiscal health is also largely dependent upon the willingness of outside investors to purchase its municipal bonds and other securities.

As recently as last summer, the state’s credit rating was lowered by all three of the largest agencies, Fitch, Moody’s and Standard & Poor’s, to the lowest in the nation...The state’s credit rating was restored only after austerity measures-—the gutting of billions from public education and social programs—-were passed last July to the satisfaction of the rating agencies and municipal bond investors.

This October, however, the state attempted a bond sale in which it only sold approximately $400 million of the $4.1 billion it had initially offered. Despite the fact that the state’s bonds typically outperform the average stock return on the benchmark S&P 500, investors demanded much higher returns. This means that the state will likely be able to sell less than the initial $4.1 billion, forcing further cuts to social programs.

In another recent development, on October 31, the state began withholding an additional 10 percent in state income taxes from workers’ paychecks...The 10 percent income tax increase is part of several regressive tax increases recently passed by the legislature which included an earlier 0.25 percent rise in the state income tax, a one percent increase in state sales tax and a doubling of the vehicle license fee...

The most recent $1.1 billion deficit and those that will follow it ensure that further cuts to social services and public infrastructure will be in the offing...

Approval ratings for both the governor and the state legislature are now at abysmal lows due to the state’s endless financial difficulties...Sacramento’s widespread unpopularity among the population will not, however, force the political establishment to reverse course.... vicious austerity measures passed last July will prove to have only been a prelude to further cuts. State Democrats and Republicans, like their counterparts at the national level, are united in making the working class pay for the financial crisis.

http://www.wsws.org/articles/2009/nov2009/cabt-n11.shtml


"a doubling of the vehicle license fee..." - wasn't the licensing fee one of the issues that brought schwartzenegger to power? am i misremembering?

[CreekDog]

1. Yup you remember it correctly

hypocritical? oh yeah of course.

[Liberal_in_LA]

2. Yes, Arnold chased Grey Davis out of office over the vehicle tax.

[Hannah Bell]

3. jeez. people really are idiots. hope they loved their cheap tabs.

[1]

4. it was much more than the vehicle tax. come on, be honest...

the enron thing (and a lot more) did grey in.

that was then. california was flush. now? not so much...

[Hannah Bell]

5. enron? you mean the corp schwartzenegger refused to sue to get the stolen money

back from?

davis was helped down by some organized money.

shwartzenazi has been 10,000 times worse, but no recall initiatives yet. gee, i wonder why?

the deep pockets like what he's doing.

[1]

6. no, i mean the enron that grey did the deal with and got recalled for. do you know califiornia?

because from your posts it doesn't seem so.

california couldn't sue to get the stolen money back because enron evaporated into thin air. poof!

davis fucked up. pure and simple. spin that however you like, but the vehicle tax was not grey's undoing...

[Hannah Bell]

8. dupe

[Hannah Bell]

9. dupe

[Hannah Bell]

10. i heard the story a little different. it's "gray," btw, you california expert, you.

[MajorChode]

11. I'm not sure where you could have heard that

Davis went down for a lot of different reasons. The license fee was just another nail in his coffin. The average license fee was around $66 and went up to about $200, but during their energy crisis their electric bills tripled. Which do you think had a bigger impact to people's pocketbook and their hate and distrust of Davis?

[Hannah Bell]

13. i didn't say he didn't go down for "lots of reasons," nor did i say tabs were the only one.

the fact that people were pissed at davis about their power bills doesn't = gray davis was responsible for the increase.

[MajorChode]

15. It's hard to imagine what you are saying then

Because that's pretty much the same thing said on post #4 which you contradicted. So maybe that's not what you said verbatim, but it would be pretty difficult for a reasonable person to infer anything else from what you did say.

And I didn't say Davis was responsible. I said the people of California held him responsible. Carter was held responsible for stagflation and Raygun was given credit for ending the cold war. That doesn't mean either is even close to being historically accurate. But one thing is for sure, Davis did accept plenty of campaign contributions from energy companies while California's deregulation was being debated, so he at least is partially responsible for that perception whether it's true or not.

[Hannah Bell]

16. you make a lot of unwarranted assumptions, then. so not much use in discussing it.

"the enron that grey did the deal with and got recalled for"

[MajorChode]

20. So it's OK for you to make "unwarranted assumptions"? Right.

There was plenty of warrant for my assumption. It doesn't really matter whether you choose to admit it or not.

Care to explain what was not accurate with the statement above? Davis did deal with Enron and other energy companies. He may not have had much choice, but deal he did, and with those same energy companies in his pocket, he was blamed for the results. Whether he actually was responsible or not is pretty much irrelevant at this point.

[1]

12. nice, don't actually present an argument, just give me shit because i spelled grey the same as...

the poster i was responding to. lame ass "i ain't got nothing" shit.


you heard the story wrong.

don't believe everything you hear. do a little research, inform yourself, get the facts.


and make sure to spellcheck my post. i'm sure i missed a word or made some mistake in my sentence structure somewhere.

that way you will have something to reply with. you know, because you apparently can't keep up with what the adults are actually discussing here.

xo,
1

[Hannah Bell]

14. i'm not sure why you expect me to "present an argument" when you presented none.

you implied davis was responsible for the enron/power crisis.

i asserted i heard it different.

do "adults" use insults in their oh-so-serious discussions?

i heard it different.

[1]

17. ok. so gr"a"y lost because vehicle fees went up $100. wow.

if hannah heard this story right, then i suppose californians deserve everything they got for electing arnold governor for the last two terms. massive budget cuts, doom, turmoil... the end of gay marriage. the whole nine yards.

i know i would be pissed and throw my whole state down a republican shitter for 8 years because of a $100 increase in my vehicle fees.

but i'm sure hannah has got the story right...

[Hannah Bell]

19. i never said that, did i? you *also* make a lot of unwarranted assumptions.

i guess that's what "adults" call "thinking".

[MajorChode]

22. 1 didn't reply to your post originally

Perhaps you should actually try reading the entire thread that you started and then tell us again who is assuming what.

[Hannah Bell]

23. and i replied to "1", not you.

[MajorChode]

24. You replied to us both

Not that it's relevant to your current confusion.

Cheers!

[hoya86]

7. ....

[annabanana]

18. Wouldn't California benefit from a reinstitution of the Inheritance tax?

That repeal always struck me as nonsensical.

[Starry Messenger]

21. They were pretty quiet about those tax increases.

I just noticed on my last paycheck. Like I can afford this shit? We are so fucked. I can't wait for this asshole to be out of office. California is still in the Bush years as far as I'm concerned. Sorry I'm not adding much. Just venting...