California Budget Mess: déjà vu all over again
November 19, 2009 in Best Of The Storm, Fresh Perspectives, Home Economics by Patrick Butterfield
California’s Budget Battle in 2009 was nasty. This coming year, expect even more drama.
Oh…and expect drama for the next decade too.
IOU’s? Bank on it.
More State Employee Layoffs? It’s in the bag.
More School Cuts? You Bet.
Legalized Marijuana? The talk with get much more serious in the next year or two.
Bankruptcy? Is that even possible?
The Wall Street Journal reports Budget Gap Widens in Sacramento
California is deep in red ink again, according to a new report projecting that the cash-strapped state faces a $21 billion budget shortfall through June 2011.
The report, published Wednesday by the California legislature’s nonpartisan analyst, painted a grim picture of the state’s finances — with a $6 billion gap forecast in the current fiscal year that goes until June 2010 and another $14 billion deficit falling in the 2010-2011 fiscal year.
The state’s Democratic controller, John Chiang, said on Wednesday that California could have trouble making payments as early as spring 2010 if tax revenue remains below forecasts, among other reasons.
Until at least June 2015, the report projected California will face annual budget shortfalls of about $20 billion.
…
The new budget report said $6 billion of the projected shortfall in the current fiscal year is largely due to unrealistic budget assumptions about tax revenue and spending on schools and prisons. A chunk of the remaining $14 billion deficit forecast for the 2010-2011 fiscal-year budget would result from the expiration of temporary budget solutions, such as use of federal-stimulus funds and accounting gimmicks, according to the report.
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