Let’s see if we can pin-point why California always seems to be broke. Now, I’m no economist, but I like to think I have some common sense, so here goes: Firstly, it’s run by liberals, who always dream up wonderful schemes where government controls everything and everybody – under the guise that they’re looking out for you, the tax payer. Secondly, these liberal dreams usually cost tons of money, and because their dreams are pie-in-the-sky and not profitable, they usually end up wasting even more money, for example, their green-scheme renewable energy ‘job’ creation, which has bankrupted the state. Thirdly, in order for them to fund these feel-good dreams, they have to raise taxes to pay for their little pet projects, thereby chasing companies and people out of the state, raising unemployment and decreasing revenue even further. Fourthly, they actually encourage illegal immigrants to move to the state by offering to pay for their education – paid by American taxes to educate illegal Mexican citizens – if that ain’t crazy then what is! And then when they are finally completely and utterly broke, they will run to the Federal government to bail them out, which, if it’s a Dem WH, they will. So, for California to keep dreaming, everyone else in America picks up the tab. Yeah, isn’t socialism grand?
California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.
The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.
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.
The Assembly budget committee
approved a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang,
after consultation with the Department of Finance
and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.
Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiang
estimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.
With such actions, Chiang
believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang
also said that “more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates.”
California borrows money early each fiscal year because the state has regular monthly expenses but receives the bulk of its tax revenues in the spring. The state borrowed $5.4 billion last fall for this purpose.
Assemblyman Bob Blumenfield, D-Woodland Hills, downplayed the significance of the new borrowing in a hearing. He said $5.4 billion was small relative to the $10 billion state leaders were prepared to borrow last year.
Some Republicans raised questions about when the borrowing from state accounts from would be paid back and why the state is spending more than expected.