tidbit-California Don't Tread on Me

A Blog from Yahoo! News:

California on the brink
Armageddon. Apocalypse. Disaster: These are the words being used to describe California's staggering $24 billion budget deficit. With a midnight deadline to balance the budget, state lawmakers are facing a daunting task: Find a way to bridge the gap or start issuing $3 billion in IOUs this week to cover the bills. [How do IOUs cover bills? Why not start selling off the state to cover?]

Almost every state is suffering from the effects of the recession, but not every state accounts for 12 percent of the national gross domestic product. According to AP, if California goes down, so goes the nation: [Wait a minute. Are we talking about the economy or the state budget here?] California's annual $1.7 trillion economy is the world's eighth-largest economy and provides a significant chunk of tax revenue for the government; California alone funds many social programs for the entire nation. [Let's look at the logic. State budget is short money. The US can't let California state government "fail" because the economy will fail and bring the other states down? Maybe the state should spend less. If the state is not bailed out maybe it will stop...that might not be a bad thing.]

Like the Big Three automakers, California may be "too big to fail." If the state implodes, the ripple effect could slow the entire nation's recovery from the recession. Burt P. Flickinger, a retail consultant, tells AP:

"California is the key catalyst for U.S. retail sales, and if California falls further you will see the U.S. economy suffer significantly." [Again, are we talking the state budget failing or the entire economy of California?]

How did California dig itself such a huge hole? The recession certainly didn't help, but Time's Kevin O'Leary writes that California's financial troubles can be traced back to the passage of Proposition 13 in 1978. [So homeowners in California would have given the state even more of their money which means less money circulating in the real-world.] An antitax measure, Prop 13 makes it extremely difficult to raise taxes or pass a budget unless a 2/3 majority in both state houses agree — a virtually impossible task. California Rep. Zoe Lofgren tells Politico:

"If we [in Congress] had to do what the California legislature does, we would never send a bill to the president of the United States,” she said. [Again, this is a bad thing?]

If the political wrangling over the budget isn't resolved by midnight tonight, Californians will be feeling the pain on every level, big and small. Just a few of the proposed spending cuts:

— State employees will be forced to take another day of unpaid leave a month, in addition to the two days leave they were forced to take starting in December. (NYT)

— Funding for the Bureau of Narcotics Enforcement will be slashed by $20 million. The "little-known unit" has played a key role in several of the state's high-profile cases: The bureau's agents helped arrest Scott Petersen for the murder of his wife and unborn child, and their investigation led to charges in Anna Nicole Smith's overdose death. (AP)

— 80 percent of state parks would be closed, 25 in the Bay Area alone, including several beaches along the peninsula. Park visitors spend an estimated $2.6 billion a year in and near state parks, but closing the parks would save only .26 percent of the $24 billion deficit. (SF Chronicle) [So if it doesn't save THAT much why do it?]

— Education funding would be reduced by $5.3 billion. School districts have already laid off 30,000 employees. Class sizes are expected to surge from 20 to 30 students and many after school programs, arts and music classes will be cut. A national education survey conducted this year ranked California 47th in per-student spending. (AP) [I can't believe that. I would believe that California's education quality is 47th.]

— Gov. Schwarzenegger is proposing to eliminate the state's $1.3 billion welfare program. Frank Mecca, the head of the County Welfare Directors Association of California, tells Time, "California could become the only state in the First World without subsistence benefits for poor children." ["It's for the children." Please, welfare (the way it's set up) is one of the first to get cut. What about entitlements? What about the millions of outlaw immigrants running from the law yet taking from our taxes?]

So far, the government is using a "wait and see" approach to California, or as a recent Politico headline stated more bluntly — "Washington to California: Drop dead." Earlier this month, White House spokesman Robert Gibbs said that the administration would "monitor" the situation, but that California's "budgetary problem unfortunately is one that they're going to have to solve." [If the federal government ever bails out the State of California...tea parties will sprout throughout this country and I will be at one. NO TAXATION WITHOUT REPRESENTATION! I refuse to pay into the budget of a state other than Colorado!]

- Lili Ladaga