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LINKS – CALFORNIA BUDGET/ECONOMY
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- CALIFORNIA KEY TO THE ECONOMY
LINKS – CALFORNIA BUDGET/ECONOMYControl over spending is key to managing California’s economy The Wall Street Journal January 10, 2009: Californaia’s Glod Rush Has Benn Reversed. http://online.wsj.com/article/SB123154816733469917.html?mod=googlenews_wsj While it has the sixth highest tax burden in the nation, according to the nonpartisan Tax Foundation, California is facing a breathtaking $40 billion budget deficit this year. This comes on the heels of a decade-long spending spree. Last year the state budget was $131 billion, up from $56 billion in 1998. Citizens are burdened by all manner of state regulations. To mention just one example, this year a new law enacted by ballot initiative bans cages chicken farmers use on the grounds that it is inhuman to put birds in cages that prevent them from spreading their wings. Complying with the new law will cost farmers hundreds of millions of dollars, which will force many to leave the state. And that will force us to buy our eggs from other states and, possibly, others nations, such as Mexico. And just as a fallen tree can divert the flow of water in a creek, bad economic policies divert the flow of investment. Entrepreneurs and investors, seeking the path of least resistance, leave when it becomes easier to make a living in more business-friendly states. In 2000, according to the state's Department of Finance, about 150,000 people moved into California. But in the years that followed the in-migration slowed, and in 2005 it reversed, when a net 52,000 people moved out. In 2008, the outflow topped 135,000 people. Consequently, Idaho, Utah and Wyoming all have unemployment rates around 5% at a time when California is suffering an unemployment rate of 9%. Californians are moving east and creating jobs in their new home states. Over the past few years, we've witnessed the state government's response to the capital and entrepreneur flight out of our state: Taxes remain high, and lawmakers employ all the tricks in the book to produce "balanced" budgets from shifting expenses around to borrowing ever larger sums of money. It's now time to turn to the ballot initiative and enact needed reforms that elected representatives in Sacramento have been unwilling to tackle on their own. We're on a dangerous fiscal course, and the people themselves will have to fundamentally change state government to correct it. Two broad reforms are needed. The first is that we must create a part-time, nonpartisan citizen legislature -- a model that has proven effective in states like Texas (part-time) and Nebraska (part-time and nonpartisan). Californians need to be able to elect leaders whose primary interest is public service, not furthering political careers. The second fundamental reform is on taxes and spending. Other states have passed a Taxpayers' Bill of Rights. We need to do the same, so I and others will soon be launching a campaign to enact the following: - Two-year budgeting. This would allow a part-time legislature the time it needs to hold hearings, conduct negotiations, and provide oversight to determine the state's spending priorities in the first year, while in the second, write and pass the budget. - End budget stalemates. This is easier than it sounds if we enact this reform: Automatically adopt the governor's proposed budget, provided it is free of tax hikes, if the legislature fails to pass a budget by its constitutional deadline. This reform would give the legislature a compelling reason to move the budget along briskly, and it would end the continual government shutdowns resulting from partisan bickering and gridlock. - New spending controls. To prevent overspending, we need mandatory limits on the growth of government. State spending should not grow faster than inflation, and a 3% budget reserve must be established to prevent unanticipated expenditures, such as natural disasters, from creating a deficit. Unless California can balance its budget it will drag the rest of the country down with it Christian Science Monitor 7/1/2009: California Crisis a Threat to U.S. Economic Recovery. http://features.csmonitor.com/politics/2009/07/01/california-crisis-a-threat-to-us-economic-recovery/ After lawmakers in Sacramento failed to meet a midnight deadline Tuesday to close the state’s $24 billion budget gap, Gov. Arnold Schwarzenegger declared a state fiscal emergency Wednesday. He hoped to prod politicians into coming to an agreement over spending cuts and keep the state’s financial crisis from deepening. Politicians continued to wrangle over cuts Wednesday that would meet the approval of Governor Schwarzenegger, who has demanded a plan that balances the budget. Meanwhile, the state’s controller prepared to issue IOUs to creditors if the state can’t agree on a spending plan by Thursday. California is not the only state struggling to pass a budget, but the depth of its crisis and the size of its economy raises the financial problem to a level of national concern. “It’s easy to make fun of all those greedy, flaky Californians, but the national economy can’t recover with an anchor the size of California holding it back,” says Dan Schnur, political scientist at the University of California in Berkeley and a former Republican strategist. Home to more than one-tenth of all Americans and an annual economy of $1.7 trillion, California is a national retail behemoth and engine for the overall economy – in real estate, auto sales, technology, construction, and agriculture. Economists worry that the budget crisis could harm the state just when it is starting to show signs of improvement. The trouble in California “makes everything worse” nationwide, says James Galbraith, a political scientist at the University of Texas in Austin. CALIFORNIA KEY TO THE ECONOMYCalifornia key to the U.S. economy Mathias, 6/23/09 (Ian, managing editor of the 5 Min. Forecast and AgoraFinancial.com., http://www.contrarianprofits.com/articles/coming-states-crisis-a-mega-trend-the-financial-%E2%80%9Cfree%E2%80%9D-market-insiders-are-selling-and-more/18220) California, the state in the most fiscal hot water, is in danger of a “multinotch” credit downgrade, Moody’s warned late Friday. The ratings agency, oddly still relevant, says that “if the [California] legislature does not take action quickly, the state’s cash situation will deteriorate to the point where the controller will have to delay most nonpriority payments in July.” If the Golden State can’t mend its budget woes, Moody’s is threatening a credit downgrade of at least two notches. California is already rated A2, Moody’s sixth highest grade and the worst of any U.S. state. A2 is also just five notches from “junk” status. If California were a country, it would be the 10th largest economy in the world… and almost a junk bond? Scary. Directory: file -> view view -> Western Europe after wwii view -> Author study: paul fleischman view -> Qpa1 7ela study Guide view -> Arctic Oil/Gas Neg view -> November 1970 Approximately 150,000-500,000 deaths Bhola Cyclone Bangladesh view -> Grade Level: 6 Unit of Study: Caribbean glce view -> Citation: Duffield, Katy view -> Table of Contents Lesson # view -> Chinese Wind Energy Disad Download 0.49 Mb. Share with your friends:
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