California Budget Gap May Reach $28.1 Billion
Kalifornia, the Bastion of Unionized Public Employees Run Amok coupled with the Poster Child of Unsustainable Progressive Policies is fiscally insolvent with no hope of ever digging itself out of the hole from which it finds itself….one can only ask “how long before they are begging for a Federal bailout. Until that time they plan to issue IOU’s & Warrants…….who knew that a State within the USA could start issuing it’s own pseudo currency.
Watch and learn, as investors shun their bonds and the financial death spiral commences. Kalifornia is the canary in the coal mine for the rest of America if we don’t start to get our own National Fiscal House in order.
Unwilling or unable to make the necessary cuts, it is only a matter of WHEN not IF it happens. If they do attempt to reign in the spending will we see proteste & riots as have been occurring in Greece, Spain,& Ireland?
California’s budget gap may widen to $28.1 billion over 18 months, according to Governor-elect Jerry Brown, who takes charge of the most-populous U.S. state next month. A cash shortage may force the use of IOUs by July, Controller John Chiang said.
The deficit estimate takes into account a $2.7 billion drop in projected estate-tax receipts, and compares with the most recent forecast of a $25 billion gap for the period, Brown said today at a public meeting of state officials. The cash accounts may be short by $2.3 billion within eight months, Chiang said at the meeting in Sacramento.
“I don’t want to say it, but this could mean IOUs and more tax-refund deferrals,” Chiang said.
Chiang, who contemplated the use of warrants this year amid a record 100-day budget impasse, issued $2.6 billion of the IOUs to vendors in July 2009 while waiting for lawmakers to pass a spending plan. Brown, a Democrat who takes office Jan. 3, faces a widening gap after negotiators closed a $19 billion deficit for the current fiscal year, which ends in June.
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