Stalled: California's Budget Crisis Hits Hard

Friday, July 17, 2009

The budget crisis in California is becoming critical. The state is still paying its debt in IOUs, but major banks are refusing to accept them. Late yesterday, the state legislature was poised to finally pass a budget and close its $26 billion deficit, but the negotiations stalled over the governor's plan to suspend a law on school funding. Schools are likely to be one of the biggest casualties from this budget crisis. On The Takeaway with more of the story is KPCC Reporter Patricia Nazario.

Guests:

Patricia Nazario

Contributors:

David J Fazekas and Jonathan Topaz

Comments [6]

CA Citizen

CA is one of the few states where a huge chunk of tax collection comes from state income tax. State income tax collection changes faster than other tax sources, and this is the major source of CA's trouble. This allowed politicians to mess up by expanding CA spending during the dot-com state tax-revenue boom. That revenue spike wouldn't have happened if CA used normal property tax and no state income tax like most other states do. Ultimately, this can be traced back to prop 13. prop 13 causes low property tax revenues which need to be supplemented by more volatile state income tax; prop 13 reduces suppily in the housing market driving up prices; and those higher house prices in CA require higher state salaries. CA voters need to stop trying to run the government budget with mob rule entitlement referendums.

Jul. 19 2009 03:11 PM
dano

Our government in California is just pathetic. A bunch of 3rd graders AFTER budget cuts could do a better job. Too many chickens in too many pots has given way to this crisis, and no one in Sacrament has the guts to fix it.

What was once the "golden state" is now a joke. God help me until I can retire (unless I get dumped because I am old and not "protected"), and then I'm out 'a here.

Jul. 18 2009 12:17 AM
pedro

MUST FUND SCHOOLS! WHAT ARE WE GOING TO DO IF WE CANT EDUCATE ALL THE ILLEGALS? I SAY ALL LEGAL CALIFORNIAN KIDS NEED TO BE KICKED OUT AS ILLEGALS SHOULD COME FIRST!

OBAMA YOUR GOD WILL SAVE CALI! I JUST PRAY TO HIM AT NIGHT! I AM A GOOD MINDLESS SHEEPLE!

Jul. 17 2009 11:10 PM
Common Sense

Why does the state government have to provide so many services? The government does not actually sustain itself, it simply takes from Peter to give to Paul. A massive government will not and can not work. It never has and never will. The best way to help the poor is to make them uncomfortable in their poverty.

Jul. 17 2009 04:48 PM
john

so 12 billion has been decided if we didnt have 12 billion left.uh back to the drawing board.

Jul. 17 2009 03:34 PM
whathappened

Schools will not get any less money. They want billions more. There are three horses in a race to see who will drive the final nain in the coffin. Schools, Health care, and gov pensions. my money is on Health but it is the final lap and they are neck and neck.

Jul. 17 2009 08:34 AM

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