California may be out of cash in FebruaryAccording to the WSJ, the deficit is expected to be $28 over the next 19 months. The State legislature has been unable to resolve the crisis as Republicans and Democrats each have just enough votes to stymy the other. Ahnold has proposed a combination of spending cuts and a 1 1/2 cents increase in the sales tax.
By Jim Christie Jim Christie Fri Dec 5, 2:26 pm ET
SAN FRANCISCO (Reuters) – California is on track to run out of cash in February or March and faces a $15 billion cash shortage by the end of its fiscal year in June unless officials plug an $11.2 billion budget gap, according to the state's budget director.
Additionally, if Gov. Arnold Schwarzenegger and lawmakers fail to close the current fiscal year's budget shortfall soon, California, the most populous U.S. state, may in March delay payments to its vendors or hand them notes promising payment, according to a December 1 letter to top lawmakers from the director of the Department of Finance, Michael Genest.
A copy of the letter was obtained on Friday by Reuters.
"Specifically, it now appears certain that available cash reserves from all sources will fall below the cash cushion target of $2.5 billion in February and that the state will begin delaying payments or paying in registered warrants in March," Genest said in his letter.
"To reduce this threat, the administration is also proposing legislation to increase internal borrowable cash resources," Genest added. "However, even with this cash solution the state will not be able to pay all of its bills in the absence of quick action on the budgetary solutions."
The last time California, the world's eighth biggest economy and the largest issuer of U.S. public debt, issued payment promises to vendors was in the early 1990s.
"We're going to be very slim in February and absent any action we go into a negative cash balance in March and that means clearly we're not going to be able to pay all of our bills," said H.D. Palmer, Schwarzenegger's spokesman on state finances. "We need to take very real action to address the immediate crisis ... We're in extraordinary fiscal circumstances."
Legislative leaders were not immediately available for comment on Genest's letter, which came on the heels of Schwarzenegger calling lawmakers into a special session to close the budget shortfall.
The state's revenues have been weakening more than expected, reduced by a lengthy housing slump, sagging retail sales, turmoil in financial markets and rising unemployment.
Schwarzenegger, a Republican, is urging the Democrat-led legislature to back his plan for closing the budget shortfall with a combination of spending cuts and new revenues, including cash from raising the state's sales tax.
Democrats oppose spending cuts and the legislature's Republican minority opposes tax increases, resulting in routine stalemates on spending plans.
Those delays and budgets often tipping into deficit are major reasons why California's general obligation debt rating is paired with Louisiana's at the bottom of Wall Street's state rankings. Standard & Poor's and Fitch Ratings currently have 'A+' ratings on the debt, while Moody's Investors Service has an 'A1' rating on the bonds.
Investors are growing increasingly concerned about the state's finances. Spreads between California general obligation debt and the benchmark triple-A curve for 20- and 30-year maturities are at their highest level of the decade, topping even those when California's GO debt rating fell to 'BBB' in 2003, according to Muni Market Data, a service of Thomson Reuters.
(Reporting by Jim Christie, Editing by Chizu Nomiyama)
The Democrats have pissed themselves and Republicans are saying "No," to any new taxes. Welcome to the Brave New World. It will be interesting to see how the lawmakers and the debt holders of California resolve this one. It might portend the future of our new nanny-state nation.
It looks like someone is putting distance between themselves and Pakistan.
ReplyDeletePakistan ISI aided Terror Group
I don't know about your part of the country, but here in mine, this is the coldest Fall in 20 years. I can't remember when we last had as consistently cold a November and early December.
ReplyDeleteIt's like the old days.
The spill over has reached AZ, too. Our soon to be GOP governor, Jan Brewer has said that tax hikes are not 'off the table'. This from a woman that has always been a staunch Repub, now singing a RINO tune.
ReplyDeleteShe must have really liked habu's song, that, or she is just tracking in the footseps of John McCain. Who has turned out not to be a Maverick, but a trailblazer for real conservative Republicans.
He and Arnold
Weather is great here, whit.
ReplyDeleteMid 70's every afternoon.
Cloud cover came in yesterday, made the morning a bit brisk, but still short sleeve weather.
Bill Roggio has a piece in the Weekly Standard where he made the case that the ISI was behind the Lashkar-e-Taiba, the Pakistan-based militant group.
ReplyDeleteJust as they sponsopred the Taliban and Osama, in Afghanistan, back in the day.
Pakistan's Jihad
In the war on terror, Islamabad is both with us and against us.
by Bill Roggio & Thomas Joscelyn
Roggio went at this blogging full time, seems to be doing well at it.
He bought into the 'Long War' ideology, though, to get it done.
ReplyDeleteFreezing my F...... Ass off here Whit!
ReplyDelete---
Uncertain Shift in an Old Quest for Balance
A battle over development on Molokai, in the Hawaiian Islands, ended abruptly when the owners of Molokai Ranch shut down operations and construction plans.
Don't you be badmouthing our
ReplyDeleteALLIES, The Pakis, 'Rat!
You got the Olive Skin of a Roman, Rat?
ReplyDelete---
...my Arms are disintegrating from Sun Damage.
White Boys Lament.
(Shoulda worn long sleeves working outdoors here)
We wil not spend money in Detroit, but will pay billions USD in tribute to tin pot dictators in Pakistan. While they support antiUS and Naato forces in Afghanistan, even attacking the Indian Embassy in Kabul.
ReplyDeleteWe should destroy their offensive nuclear capacity and then start a fresh, with them.
Blast 'em back to the stone age, cut off their credit lines and let 'em starve. Declare Pakistan a terrorist State and begin the real war upon the State sponsors of the 9-11-01 attacks on NYCity and DC. The short war that Bush and Company have avoided their legal duty to prosecute, for well over seven years, now.
I've always gone for long sleeves and the big brim, when working outside, doug. The boys knew I was a tad off, on the framing crews.
ReplyDeleteEveryone else bronzed by the sun, me, making my own shade.
That skin cancer, contributed in killin' more than a few folks I've known.
I'll find a link to a NY Times article that shows what the Sun does to skin(Short of Skin Cancer), just plain old damage resulting in the collegin that sposed to make a nice matrix for holding blood vessels and stuff shrivels up and leaves a mushy mess, so that whenever it gets scratched, or whatever, it takes forever to heal.
ReplyDelete...bruise come easy too.
The Skin Doc says it's analogous to a PVC pipe under mud versus under stable earth when a truck drives over the mud, the pipe breaks.
...in humans, those broken pipes cause bruises.
...and easily injured skin.
I certainly believe that, doug.
ReplyDeleteThe sun, here anyway, is a killer.
Bakes everything. Leave that PVC out in it for one summer season, it becomes so brittle, you'd be amazed. Shatters like pottery.
A coat of paint will slow that process down, but not stop it.
Caint find the durned thing.
ReplyDelete33 Minutes: Protecting America in the New Missile Age
UV Photography Reveals Sun Damage
Wood here turns into Iron, haven't looked into how that works.
ReplyDelete...makes wood damned hard to work with, I know that.
Pakistan militant group builds web of Western recruits
ReplyDeleteLashkar-e-Taiba, the extremists blamed in the Mumbai attacks, are seen as a ladder rung to get to Al Qaeda for "newbie" militants from the U.S. and Britain.
• Lashkar base reportedly raided
• AP: Pakistan arrests suspected Mumbai plotter
Typical Dec. weather here in N. Texas. Cool one day, warm the next, with 30 mph wind either out of the North or out of the South. Can't seem to make up it's mind.
ReplyDelete"It looks like someone is putting distance between themselves and Pakistan."
ReplyDeleteThat *would* indeed be news, whit. I consider myself a fair hand at reading between the lines and it's just not there.
ISI has been compromised for how long? And we're going to distance ourselves from the country now? Now that we have movement? Truly begs credulity.
I think people have a natural tendency to look for what they want to see, not what's actually going on.
Roggio pegged it last week: The attack was an attempt to negate gains we've made in South Asia over the past year - also noting, contra Rat, that those missile strikes in Pakistan have had their sought-after effect in Afghanistan. Who loves ya, baby? As one commenter put it: Mumbai was a bloody horse's head. So, too, was the Marriott bombing.
Now, what I said months ago is beginning to present itself to others: We are working both with and against Islamabad, taking advantage of the departure of Musharraf to move a strategy that was born in Afghanistan across the border to its neighbor. Look, ma: We're ambidextrous.
Who's not on board with The Long War? Joint Forces Cmd got its marching orders, cutting JSOC loose to focus on its own little patch.
We're *all* Long Warriors now.
"those missile strikes in Pakistan have had their sought-after effect in Afghanistan."
ReplyDelete---
WHAT is that?
(line reader only, til death do me depart)
Supposedly lowest hotel occupancy in Paradise since 9-11.
ReplyDeleteMarriot Maui doing better than average, I guess.
...being unbombed.
...never forget after 9-11 here:
ReplyDeleteStreets were like the twilight zone after al-Bob's Aliens had neutron-bombed us out of existence.
"WHAT is that?"
ReplyDeleteDisruption of bad guy operations downstream.
We were living on Chain Bridge Rd. in Fairfax, VA, at the time (had just come home). All day, that main thoroughfare was bumper-to-bumper with those headed home from the District. By 7 PM, you could run naked down the middle of the street.
ReplyDeleteNo air or land traffic. Crickets. Like we were back in the Belgian countryside for one night.
"Disruption of bad guy operations downstream."
ReplyDeleteThings are going better in Afghanistan?
Than they would be otherwise?
ReplyDeleteAb-so-fucking-lutely.
(I guess if that's not a scary thought, I don't know what is.)
But the problem in Afghanistan is also, well, Afghanistan. Karzai's guys, who happen to be our enemies. Doesn't get any more fun than that. He should be out next year; we'll see what we can swing afterward.
ReplyDelete