Looking for Billions: California Is in Dire Financial Trouble… AGAIN « Frugal Café Blog Zone

Looking for Billions: California Is in Dire Financial Trouble… AGAIN

Posted By on February 1, 2012

 

California is in dire financial trouble… AGAIN.

The liberal, overspending state with one of the nation’s highest unemployment rates, that has the most expensive high school in the country, that pays millions upon millions in taxpayer monies for welfare and entitlement programs and multiple freebies to more than 3 million illegal aliens, needs to find $3.3 billion fast.

California lawmakers keep trying to raise revenue, ease up on the state’s three-strikes law, and borrow more money rather than make a focused effort to curtail its bleeding-from-a-gunshot-wound spending.

From Los Angeles Times, California needs to find $3 billion by March:

State lawmakers moved to avoid a cash crunch Tuesday as the controller warned that California could be in the red by early March.

A lag in revenue and higher-than-expected spending mean the state needs to scrape together more than $3 billion to stay in the black and keep a comfortable cash reserve, the controller said.

A legislative committee advanced a bill that would expand the state’s ability to borrow from dedicated funds to cover daily expenses, while Gov. Jerry Brown’s administration planned to tap universities and take other measures to help plug the gap.

The hunt for cash came on a busy day in the Capitol that included a step to ask voters to ease the state’s controversial three-strikes law. The Assembly approved a bill to authorize a ballot measure on the issue for November 2014, but the legislation faces an uncertain future in the Senate.

The proposal would ask voters whether to impose harsh prison sentences only on offenders whose third conviction is for a violent or serious crime rather than any felony, as the law now requires. The hotly debated idea passed the Assembly 41 to 34, without a single Republican vote.

Of all the states with three-strikes laws, only California applies the rules to nonviolent offenders, said Assemblyman Mike Davis (D-Los Angeles), the bill’s author. He said the measure could save $15 million annually for the first 10 years.

From Capitol Alert, Controller: State to run out of cash in March without action:

California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.

The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.

But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on.

The Assembly budget committee approved a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.

Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiang estimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.


Dismal statistics
about the Golden State:

More than three in 10 people in California don’t have enough savings to get by for three months if they were to lose their job, according to a study released Tuesday.

More than two years after the official end of the recession, 30.9% of Californians have little to no financial cushion, according to the report by the nonprofit Corp. for Enterprise Development. If illiquid assets — things that can’t quickly or easily be converted into cash, such as a home — are excluded from the equation, the number rises to an even more troubling 43.1%. The complete study is available here.

[…]

Judged by its unemployment rate, California ranks 49th. And the state’s underemployment rate — which measures those who work part time but want to be full time — is 50th. California also ranks 49th in average credit-card debt.

As for education, California is 50th in high-school degree attainment, 44th in eighth-grade math proficiency and 47th in reading ability, according to the study.

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About the author

I'm a conservative frugalist. My priorities: Watchdogging the government, making sure our tax dollars are spent wisely, living within our budgets (at home and in Washington, DC), and adhering to our Constitution and the conservative principles upon which it was developed by our founding fathers. Also, loving God, my family, and my country. Be wise, be frugal. God bless America!      

Comments

One Response to “Looking for Billions: California Is in Dire Financial Trouble… AGAIN”

  1. Brett says:

    This is California, one of the most liberal, entitlement giving, socialist states in the nation. No one should be surprised by any of this.