The latest version of the state budget has been passed by the California Legislature and Gov. Arnold Schwarzenegger expects to sign it in the next few days. It will soon stop the flow of IOUs to pay state bills, but is this a real budget fix?
The $26 billion budget gap was closed with almost $16 billion in spending cuts, and the rest came from borrowing and accounting tricks. But the Assembly refused to take $1 billion from local governments and that will force Schwarzenegger to find that amount in cuts in other areas using his blue pencil on the spending plan.
This budget may fall apart in months -- unless the economy rebounds quickly and there is more money coming in from sales taxes and other revenue sources tied to the economy.
I look for it to fall apart because they won't be able to stop spending. They have gotten to accustomed to spending when ever and what ever they want. If it was passed without taking money from city governments then at least thats a plus but I think it will be at the cost of more of our education system.
Yes, we have another State budget, just like we had one in March that included this fiscal year... I give it another three months and we will be broke again! More foreclosures and bankruptcies from State Employees this will be the BIG push to push the State of California and US into a depression... it's going to be roller coaster summer!
The money isn't there and people have slowed down their spending; it won't be there. For all practical purposes we are bankrupt in every way except the terminology. It will be interesting to watch when taxes going into this budget slow down to a trickle.
Either we are schizo, or the powers that be keep us off balance, pursuing agenda of their own. The various media report
consumer spending...up
car sales...up
manufacture of consumer goods...up
wholesale prices...up
prices for consumer goods...up
demand for real estate and sales ...up
user fees to city. county and state...up
Cost of energy (except gasoline)...up
but the same media reports that the legislature can't function because tax revenues...DOWN.