Saturday, January 31, 2009

State of California on the eve of catastrophe

Front page editorial from the Red Bluff Daily News (The Voice of Tehama County since 1885):
The once great state of California will likely become a national disgrace tomorrow.

While the federal government races to revive a failing economy, leaders in Sacramento wallow in finger-pointing and self-righteous bluster. Their failure to pass even an interim solution to the state's $40 billion deficit by Sunday's deadline would exponentially deepen this fiscal crisis, forcing the treasury to default on its obligations and worsening the financial plight of families and taxpayers.

Californians should be furious. We are. That's why the Daily News and other California Newspaper Partnership newsrooms are taking this rare step of placing the editorial board's opinion on the front page. Others must raise their voices until the political cost of inaction in Sacramento becomes higher than the perceived value to lawmakers of clinging to principles that grim economic reality has rendered meaningless. Gov. Arnold Schwarzenegger and the Legislature must adopt a new budget now. The people should demand it.

Sunday, the state will stop paying some of its bills and start issuing IOUs. It will stiff taxpayers due refunds, students depending on Cal Grants to stay in school and contractors who have performed work. If the days without a budget lengthen, economic havoc will spread like a virus, and the state's bad faith and credit will infect cities, counties and schools.

The governor and all 120 legislators share responsibility for this.

This day didn't sneak up on anyone....MORE

From the Orange County Register:

Cash deferrals from state will start Sunday

State Controller John Chiang warned Friday that he will begin withholding tax refunds and vendor payments on Sunday or else California will lose its ability to borrow money.

"Nobody will lend to the state of California today because we have a $42 billion deficit and we have no sound plan by the legislature or the governor," Chiang said at an economic luncheon in Dana Point.

Chiang said he has been forced to make painful decisions to help keep the state afloat while the legislature fights over the budget.

"On Sunday, February 1, I will have to start deferrals," he said. "It is too late for the governor and the legislature to take significant action to remedy the fact that I have to start the deferral process.">>>MORE

Tulare County: County won't pay state's tab

Trinity County: County may use IOU's

Kern County: Calif. county considers declaring fiscal emergency

1927 Movie poster at MovieGoods:

(Be careful what you wish for)