Cash Is King
July 12, 2007 seemed to be an unremarkable day here in Sacramento. It was a Thursday with a pleasant un-summer-like high temperature of 85 degrees. The budget was almost two weeks late, though that certainly wasn't surprising.
But that day now stands as a milestone for the long crisis in California's governance: it was the last time the Golden State had "real"… not borrowed… cash on hand to pay its bills. Ever since, finance officials have scrounged for money to keep the wheels turning — a process that's expected to continue in 2010.
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On Sept. 4, Come Get Your Money
Summer doesn't officially end until September 22. But the state's Summer of Debt — at least from a cash perspective — will end on September 4, according to Controller John Chiang.
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Money For Nothing
It was a busy second day of the new fiscal year at the printing facility tucked inside a quiet business park in a shaded east Sacramento neighborhood. But unlike most days, they weren't printing thousands of checks paid by the state of California.
This time, they were printing documents that aren't worth anything. For now, at least.
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End of Days
It was an unusual ending to a long day, the final day of the 2008-2009 fiscal year. But there was no surprise ending: the conventional wisdom won out, as the state slipped into the new budget year with no solutions in place to a deficit that could be as large as $24 billion.
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Don't Touch That Dial
You're not really surprised that things turned out this way today, are you?
Of course, that's not to say that some parts of today's budget news weren't unexpected. And few would venture a guess as to what happens next… though indications are the Legislature will be spending the final weekend of June in session.
For a formal look at today's events, dial in to The California Report tomorrow morning. In the meantime…
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The June Swoon: Budget Mania
Welcome to the final month of the 2008-2009 fiscal year for state government, and buckle your seatbelts for what promises to be one of the most unusual — and difficult — summers in state Capitol history.
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If Props Fail, $21.3 Billion Deficit
Late word this evening that will get everyone's attention: Governor Arnold Schwarzenegger has informed legislative leaders that if three of the six budget-related ballot measures fail next Tuesday, the state faces a $21.3 billion deficit between now and next July.
In a letter to the four legislators this afternoon, Schwarzenegger actually offered two new assessments from his budget team of what lies in store for California: a $15.4 billion shortfall if Propositions 1C, 1D, and 1E pass, and the aforementioned $21.3 billion if they fail.
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State Worker Retirement Cost: $48.2 Billion
If there's any issue facing state government that's not quite reared its ugly head… but will… it's the price tag for retirement benefits of state employees. And today, a new estimate of those costs may only reinforce the notion that the issue is a ticking fiscal time bomb.
Controller John Chiang has released a new report, conducted by outside researchers, that pegs California will have to shell out some $48.2 billion to cover its current state worker retiree obligations on medical and dental care.
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The Waiting is the Hardest Part
"You cannot escape the responsibility of tomorrow by evading it today."
That's a pretty good message for occupants of California's statehouse, words attributed to a guy who's getting a lot of attention this week: 16, in current presidential parlance. Abraham Lincoln.
One more, you say? How about this one from the current top guy, 44, spoken a couple of weeks before he took office last month.
"Our problem is not just a deficit of dollars," said President Barack Obama. "It's a deficit of accountability and a deficit of trust."
Both quotes seem worth pondering as just about every observer of California politics and public policy waits for some kind of compromise agreement on the state's massive $40 billion budget shortfall.
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Company Town Preps for Shutdown
The storm clouds blew in to Sacramento this morning, and the timing couldn't have been more appropriate: the budget deficit chickens are coming home to roost, as tens of thousands of state workers are preparing for their first day off without pay.
The inaugural "Furlough Friday" of 2009 is set for tomorrow at government offices around California. And here in the true company town of state government, there will no doubt be an economic impact; just take the 9% cut in pay for each employee and multiply it by the region's state worker population of more than 75,000. Most of those folks live in Sacramento County, making the state the number one boss around here.
A spokesman for Governor Schwarzengger says some 90% of the state workers covered by the furlough decision will be staying home manana. Only a relative few divisions — public safety, for example– will get to either take furloughs on other days in the month, or defer the days off for as much as two years (though still lose part of the paycheck now).
The latest kerfuffle on the issue came this morning, with official word from Sacramento Superior Court Judge Patrick Marlette that he has "no views" on whether state employees who work for constitutional officers must also be furloughed.
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About the Blogger
John Myers is Sacramento Bureau Chief for KQED's The California Report, heard on public radio stations around the state. More about John...
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