Tuesday, January 31, 2012

California is America's Greece

California State Controller John Chiang sent a letter to state lawmakers today warning that without action, California would run out of cash in March 2012.

The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.
But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on.

$2.6 billion lower revenues than projected combined with $2.6 billion in more expenditures than planned.

Says a lot about a State Government led by a Governor who thinks that the High Speed Rail Network Board's $100 billion - $120 billion cost estimate was overstated and the revenues of the State's punitive cap and trade fee structure will bring in excess of $1 billion annually.

Only a few Republicans are apparently raising questions about not only the higher than expected revenues, but how and when the delayed payments and 'adjusted' state accounts will be resolved.

Of course none of this is because of or the responsibility of Governor Brown and the progressive Democrats that dominate California.  The State's fiscal challenges are the result of the Republicans preventing tax increases and the courts that hamstring the State's budget.

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