Schwarzenegger declares state in fiscal emergency

[Adsos Letter]

Source: Reuters

SAN FRANCISCO (Reuters) - California Gov. Arnold Schwarzenegger declared a fiscal emergency on Friday to call lawmakers into another special session to tackle the state's weakening finances, and separately ordered state officials to prepare to furlough and lay off employees to cut costs.

His two actions mark a dramatic escalation in the budget battle waged in recent weeks in Sacramento, the capital of the most populous U.S. state and world's eighth-largest economy, as its revenues fall harder and faster than expected.

California's state government now faces a $40 billion budget shortfall over its current and next fiscal years and is on track to run out of cash in February.

The legislature now has 45 days to pass and send a bill or bills addressing the state budget to Schwarzenegger.





Read more: http://www.reuters.com/article/domesticNews/idUSN1947171320081220?feedType=RSS&feedName=domesticNews&rpc=22&sp=true

[Skink]

1. Ya.

Fiscal emergency.Ya.

[villager]

2. With the veto, this Hollywood MFer is out of control, now...

n/t

[JDPriestly]

3. Schwarzenegger would rather blame and intimidate the majority Democrats

than bring his own fellow Republicans into line. Majority rules, Schwarzenegger.

[No Elephants]

25. No. Ahnuld Uber Alles!

[nc4bo]

4. Is California the ONLY state barely hanging on? What about other

states (no offense intended to west coast Du'ers).

Why is Arnold hogging all the spotlight/Why is the press continuously shining the spotlight on Arnold?

:wtf:

[balantz]

5. The fact that California is the world's eighth largest economy I think has to do with it. n/t

[Adsos Letter]

6. Celebrity status, plus...

he came into office spouting off about how he was going to repair the budget deficit...and immediately eliminated a tax on vehicle registration.

We sure could use that funding now...

[WriteDown]

7. The problem has little to do with vehicle registrations though...

Property values were in free fall and property taxes have taken a corresponding drop.

[Adsos Letter]

8. True enough.

[CountAllVotes]

13. he did not eliminate the tax on vehicles

he lowered it. It was never gone.

He used this tactic to get many rather stupid voters in California to vote for him by lowering the fees but they were never eliminated.

That means the fees will go back up but if you still own the same car you probably won't notice much of an increase in fees due being the age of the car correlates with the amount of the fees that are paid.

In any event, I sure wish they'd dump Arnuld! :mad:

:kick:

[Lost-in-FL]

24. FL should join soon...

I heard somewhere the state isn't doing well with their finances.

[Barbara2423]

9. Arnold Has Mismanaged California from the Beginning

Arnold wants to layoff civil servants (state workers) and keep the private contractors whose yearly contracts are $240,000.00 per year. When he lays off state workers they will no longer put money back into the economy but receive unemployment benefits from the government, which means the government will be giving them money not to work. Beside when he furloughs state workers they pay less taxes, so again the state will receive less revenue from them. Isn't this the problem anyway? People are unemployed so they cannot put money back into the System? There are many small businesses that will close because state workers will not be able to purchase their products. Arnold has no clue on how to run a government - its complicated. This is what happens when you elect a governor who has no experience other than acting in movies.

[Thothmes]

17. It would appear that the Legislature of the State of California

also mismanages the business of the people of that state.

[shanti]

31. sacramento

will be in a world of hurt if this happens. it will get very ugly.

[AsahinaKimi]

10. So um, he's just noticing this now?....

Where the hell has he been? Making another Terminator movie?

[Orrin_73]

11. One of the reasons they recalled

Gray Davis was that California had a budget deficit of $20 billion. Now under Arnold Schwarzenegger it has double that, why aren't they recalling Schwarzenegger?

[Blue_Tires]

19. sadly, too many people have short memories

and a pop culture icon, once in, is damn near impossible to get out...

and didnt arnold just veto the state's budget proposal?

[Ian David]

12. What an economic girlie man!

[Deja Q]

14. Wow, I just felt a surge of inflation...

[olddad56]

15. His proposed two day a month furlough will amount to about a 10% pay cut.

That alone will cause many state employees to struggle. There is a large concentration of state employees in the Sacramento area. This will trickle down to the local businesses, who will, in some cases have to lay some of their employees off. It will be interesting.

[Sex Pistol]

16. California is five times larger than my state but we are only facing a $2 billion shortfall.

All I can say is that California must be one terribly mismanaged state.

[olddad56]

18. Ironically, Grey Davis had made some very good political appointments.

Management within state government has never been more wasteful an maligned as with Arnold. At least not in the 34 years I have been involved with it.

His administration is absolutely the worst.

[No Elephants]

26. What a shock. Whodda thunk Gropenator would not have made an outstanding Gov? [sarcasm] He got

elected on name recognition, money and Maria Shriver's covering for his roaming hands.

[UTUSN]

20. So the Recall wasn't called for THEN, or IS called for NOW?!1 n/t

[No Elephants]

27. Don't know if the recall was called for or not, but Ahnuld called for it.

[shanti]

32. the first one cost the state

millions of dollars. we can't afford it now :(

[tama]

21. Isn't the real issue

- as fun it is to mock Ahrnold and play partisan politics - that California as well as half the other states are practically bankrupt and can't keep on paying wages to teachers etc. and fund what they fund much longer, if any longer? That the political structures of USA are crumbling fast, what's left of them...

Shouldn't the discussion be about
1) should they be saved in the first place?
2) if they should, how? (Obama takes care of everything, no worries?)
3) if not, what then?

[JCMach1]

23. It's called bite the bullet on Property Taxes, or STFU

You can't have a Cadillac if your revenue won't but you a Ford Focus.

[Igel]

29. That's much of it.

There's a consistent problem: Legislatures (or governors, or both) believe in spending every cent of tax revenue when times are good, not just spending them on one-off projects or things but on programs that "help" people. Now, they do help people, but the help's contingent on either constantly increasing revenues or constant revenue.

But revenue is neither. Then, when revenues decline, there's a budget emergency. One typical response is to increase taxes to preserve programs. Then, when times are good, the tax revenue soars. Programs expand. Then there's a downturn, and taxes are increased to preserve programs.

It takes will power to see tax revenues outstrip expenses, and decide to just put the money aside for the inevitable downturn. There aren't votes in it. Politicians really can't let money sit there, because the populace won't let them.

The tax code is also poorly written. It's very "progressive". It targets those with higher incomes, so a disproportionate amount of revenue comes from the top 1%, 5%, and 10% of households. Except far too often when there's a recession, it's the top earning households that lose a disproportionate amount of their income. Now, they're still well off, but it matters far more to California when one household's income dips from $10 million to $5 million than when 20 households with collective income of $10 million drops to $5 million. Ideologically it may be preferable, and satisfies some people's sense of social justice, but it bites you in the butt because it leads to fiscal problems. Great in good times, doubly bad in bad times. NY does the same thing, and is facing the same problem.

[iamincali83]

22. People are idiots.

I remember how in 2003 a lot people I knew hated Gray Davis and thought it would be "cool" if a movie star is our Governor! How did that work out?! He's nothing but a joke and he's worse than Gray Davis! Were all screwed!

[doodadem]

28. My husband was laid off in Calif.

6 months ago, and hasn't been able to get anything else since. This is the case in half the people we know here. How long before they decide to pull unemployment benefits, and we finish going down the tubes?

The whole thing with recalling Grey Davis was a sham anyway. The man was blackmailed--pay our price, or we're turning off the lights in Calif. What else was he supposed to do?

[davidinalameda]

30. just send him a bill with NO spending

that should make the repugs happy