Thread: California Treasurer: State To Halt Infrastructure Spending

Treasurer: State to halt infrastructure spending

By JULIET WILLIAMS - Associated Press | Monday, December 8, 2008 7:07 PM PST

SACRAMENTO ---- California will have to stop financing nearly all infrastructure projects within two weeks if lawmakers don't immediately solve the state's $11.2 billion budget shortfall, state Treasurer Bill Lockyer warned Monday as legislators met in a rare joint session.

If the Legislature fails to act, Lockyer said about $5 billion in loans for highway projects, school construction and other public works would be cut off, just as Gov. Arnold Schwarzenegger and others are urging greater investment in such initiatives to help shore up the faltering economy.

Loss of the $5 billion would cost 200,000 jobs and eliminate $12.5 billion in private sector revenue, Lockyer told members of the state Senate and Assembly.

"That's the poison apple that nobody asked for and nobody wants," Lockyer said.

He warned that the slowdown would hit every area of the state.

"There's only one way to prevent these shutdowns: Adopt an honest, balanced budget very soon," Lockyer said.

The testimony by Lockyer, State Controller John Chiang and other top finance experts was billed as an effort to present a uniform financial picture for a new legislative session that includes 25 rookie lawmakers facing one of the worst budget situations since the Great Depression.

Lawmakers are dealing with an $11.2 billion shortfall for the fiscal year that ends June 30. The deficit is forecast to grow to $28 billion over the next 18 months unless steps are taken to eliminate the red ink.

Schwarzenegger declared a fiscal emergency last week and for the third time this year called lawmakers into special session. He warned that California is in danger of running out of daily operating cash within two months and proposed $4.7 billion in tax increases and $4.4 billion in program cuts.

So far, Democrats and Republicans have been unable to reach consensus on how to close the gap. Republicans have remained steadfastly against raising taxes, but have failed to offer their own balanced budget proposal.

Chiang warned that the deficit is growing by hundreds of millions of dollars a week as lawmakers bicker over ideology. He said the state has already borrowed all it can from its own special funds.

"In the past four weeks that we have argued about the budget, our problem grew by as much as $500 million," Chiang said.

The state's nonpartisan legislative analyst, Mac Taylor, told legislators the deficit has grown so much over the last nine months that they can't balance the budget just with spending cuts.

For instance, he said, to address the deficit solely by cutting programs, the state would have to end all funding for the University of California and California State University systems, all welfare payments and stop paying for developmental services, mental health and in-home support.

To do it through tax increases alone would require a 2 percentage point increase in the state sales tax, a 15 percent personal income tax surcharge and a 2 percentage point increase in the corporate tax rate.

Schwarzenegger's budget proposals include raising the state sales tax by 1.5 percentage points ---- or a penny and a half on the dollar ---- for three years, broadening the sales tax to include more services and increasing the Department of Motor Vehicles' annual fee for registering vehicles in California by $12.

The governor also wants to cut about $2.5 billion in education funding this fiscal year.

Schwarzenegger has also lobbied for an economic stimulus plan, and told President-elect Barack Obama at a meeting of governors last week that California has $28 billion-worth of projects the incoming Obama administration could fund within its first 120 days.

But the state's own fund to lend money to private firms and others for infrastructure projects is running dry and is needed to keep the state afloat, Lockyer warned Monday.

The state usually sells bonds to repay those loans, but Lockyer said the credit market is so bad ---- and California's finances so ruined ---- that he can't sell any more bonds until the budget mess is addressed.

Assembly Minority Leader Mike Villines, R-Clovis, agreed that Lockyer and the other experts painted a bleak picture, but he said he remained adamant that increasing taxes would further hurt the economy and residents who are struggling.

"We already have all the information, and the choices are clear. You're going to have to make deep, long cuts," Villines said.

Assembly Speaker Karen Bass, D-Los Angeles, said she remains hopeful that legislators can vote on a budget compromise by the end of December, despite weeks of meetings between legislative leaders and the governor that have so far failed to yield a deal.

She said she hoped the joint session briefing would serve as a wake-up call of sorts for some legislators.

"I think some of my colleagues ---- on both sides of the aisle ---- are in denial, frankly," Bass said.

Bass said she and Assembly Budget committee chairwoman Noreen Evans would travel to Washington, D.C. Monday night to appeal to Congress and Obama's transition team for federal help.

Despite his own pleas for an economic stimulus package that includes California infrastructure, Schwarzenegger has scoffed at the idea of asking the federal government to help the state address its financial problems before it deals with its own mess.

http://www.nctimes.com/articles/2008/12 ... 0cdb05.txt

"There's only one way to prevent these shutdowns: Adopt an honest, balanced budget very soon," Lockyer said.

WRONG! There's another more obvious way, CEASE ALL programs that provide freebies to illegal aliens and their families. CEASE the CA Dream Act. STOP ALL welfare programs to illegal aliens families. DEPORT! DEPORT! DEPORT!

California will have to stop financing nearly all infrastructure projects within two weeks if lawmakers don't immediately solve the state's $11.2 billion budget shortfall, state Treasurer Bill Lockyer warned Monday as legislators met in a rare joint session

Yet, still no plans to "stop financing" the millions of illegal invaders currently squatting in this state! American citizens have to suffer because our elected officials refuse to cutoff the funding for those who are criminal law breakers and have no business being here in the first place!

That's disgusting!

As with the b.s. federal bailouts, these Mexican government and drug cartel owned and controlled pieces of S!@# have to continue providing money for health care, tuition assistance, heating assistance and other benefits for their chosen people while telling LEGAL Mexifornians to go to hell just like the skunks in Capital Hell who say the same to the American people. On a hot humid day I can smell the House and Senate...... You hear that Harry Reid you ignorant, arrogant, elitist, corrupt horse's rear end!!!! Hey Annie Schwarzenegger you better wake up as your wife cut off your balls and tossed them into the neighbor's backyard........

Maine stopped all there's a couple of weeks ago. Anything not under contract was taken off the table.
They've been in full budget cutting mode.
I expect the State to have a damn bake sale soon to pay the debt!
Another problem for our country is asphalt prices. Evidently there were 3 major companies that supplied it.
One bought out another and now there is only 2.
They had more than doubled the prices of asphalt.
(Can someone check this stat?)