Wikinvest Wire

The California budget crisis continues

Saturday, June 27, 2009

It looks as though California will begin issuing IOUs next week to pay their bills. What happens next is anyone's guess as major banks have made no commitments to honor them.

US News and World Report compiled a list of things they believe most people don't know about the situation. Included below are the ones that were news to me:

3. Gov. Arnold Schwarzenegger's budget proposes slashing health and welfare spending by 26.5 percent and closing 80 percent of state parks.

5. Democrats are seeking alternatives to major cuts, such as rescinding $1 billion in corporate tax breaks, enacting a 10 percent tax on oil pumped in California, and tapping into a $4.5 billion rainy-day fund.

7. California residents with incomes of more than $500,000 pay nearly 40 percent of the state's personal income tax revenue.

9. California has the highest research and development tax credit in the country, which will cost the state $1.2 billion in potential tax revenue this year.
Actually, cuts to health care and state parks were known to me, but not the extent of the cuts which appear to be draconian, albeit probably necessary given the current predicament.

Has there been any word on slashing any of the generous pensions and/or salary and benefit packages for state workers? That would be a good PR move.



Dan said...

perhaps we could sell the place back to mexico?

Anonymous said...

In Georgia they spent $1.2M to reinforce the ruins of an old home formerly owned by a wealthy family on Cumberland island. The home has little historical value and they are RUINS, not something one can walk around in and tour.

Govn't is too big in all areas. It's not about making cuts in a few areas. That will never fix it. It's about reducing everything back to constitutional levels. That will never happen, hence we will see our currency destroyed instead.

Anonymous said...

The large number of government workers and their high pay/benefit levels is the problem.

Why is this so hard to see?

Wake up America!!!

Anonymous said...

Yeah, why should public sector workers get COLA pensions worth 10 times what private sector workers get, plus life time health care on top of it. Time to reduce their pensions so they are equal to private sector pensions. Make them buy their own health insurance like private sector retirees do. Public sector workers should live at the same level as the private sector does.

Anonymous said...

Does anyone have an data on the percent of Calif. voters depend financially on the state in some form or other ?

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