In a statement to the Fresno Bee on Monday, Governor Arnold Schwarzenegger estimated California’s $84.6B budget will fall further out of balance by $5 billion to $7 billion this fiscal year, on top of a $7.4 billion deficit already projected for 2010-11.
According to reports, the State is at least $1B behind in revenue collection, and is facing shortages based on wishful thinking that may not pan out. Meanwhile, in contrast to comments from legislators, including Assemblywoman Joan Buchanan (AD-15), who say, “There’s no more fat left to cut out of the budget,” Schwarzenegger said,
“There’s no more fat left to cut out of the budget” — Joan Buchanan, Nov 4
“We are not out of the woods yet. … The key thing is, we have to go and still make cuts and still rein in the spending,” Schwarzenegger said. “It will be tougher because I think the low-hanging fruits and the medium-hanging fruits are all gone. I think that now we are going to the high-hanging fruits, and very tough decisions still have to be made.”
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LA Times says $21 BILLION. Every day there is a new number and it’s all bad.
http://www.latimes.com/news/local/la-me-budget-deficit18-2009nov18,0,7647152.story?
I was off by $11B. SJ Mercury News now pegs California 2010 deficit at $25B
http://www.mercurynews.com/ci_13784035%3f
It’s worse than that Bill. Ads for bonds often state “Without raising taxes….” and technically they are correct. You are not specifically required to raise taxes but the money will have to come from somewhere in the state budget. The Governor did not indicate what he thought ought to be cut from the budget to cover the bond and interest costs.
Yeah. like what they really don’t want you to remember is that for every dollar borrowed in a bond it costs two more dollars in interest over the life of the bond. It’s like LOSING the lottery in a lump sum.
People forget that Bonds are really another form of expense and payment. Further, many State Bonds are issued on the concept that the revenue from them is Tax Exempt.
There was a concept of gathering money first to pay for something, but that seems to have been forgotten.
In the May 22 meeting with Chamber of Commerce’s from the East Bay, Joan Buchanan put it more directly: there is no Fat or muscle left, any cuts will have to cut off whole limbs.
The same week the Governor announces that the state budget is out of balance, he puts $11.1 billion in water bonds on the 2010 ballot.
The money to pay back these bonds PLUS INTEREST will have to come out of the same General Fund that is already short $7 billion this year.
This is the kind of budget insanity that has put California where it is. Bonds aren’t free and with all the other bonds already in approved by voters, byt 2015, 10% of the state General Fund budget will have to go toward paying for these bonds.
Note to everyone: Bonds are useful financing tools, but they are not free.