CA budget deal goes boom

[sutro]

Re: CA budget deal goes boom

If California goes bankrupt, does that mean we can write down the principle on all this debt?

Those public servants perform a function much like my granddad the street car conductor who could afford to by a house in 1920 San Francisco.

[kartius919]

Re: CA budget deal goes boom

Would it be better for CA to declare bankruptcy and stop servicing the unserviceable debt? It will only be more painful if CA keeps delaying the inevitable. Of course, I would prefer a bailout. CA is too big to fail.

[rj1]

Re: CA budget deal goes boom

Would it be better for CA to declare bankruptcy and stop servicing the unserviceable debt? It will only be more painful if CA keeps delaying the inevitable.

Then they can't borrow money. The fact that their bonds could potentially get downgraded to junk status is the only thing in my view that is pushing them hard to find a solution.

[dbarberic]

Re: CA budget deal goes boom

Barring a miracle - i.e. one or more politicians willing to take the fall - I predict no California legislative solution to the budget impasse.

No one wants to be associated with firing a bunch of firemen/policemen/teachers, cutting societal safety nets and benefits to seniors, etc etc.

That is exactly it. It is easier to do nothing and then point fingers, than it is to actually vote for a decision that would cut the budget and have your name associated with all the cuts necessary.

[grapejelly]

Re: CA budget deal goes boom

this "solution" has been to borrow from local governments who are supposed to borrow in turn, "secured by" the promise to pay by the state, the same state that doesn't have the money to pay in the first place?

And this is a "solution"??

[kartius919]

Re: CA budget deal goes boom

Stop borrowing money.

[don]

Re: CA budget deal goes boom

From Ground Zero (These are all SF Bay Area towns)

Many unhappy with budget deal

Locals speak harsh words
By Melissa Murphy
Posted: 07/23/2009 08:04:39 AM PDT

Vacaville suspended its first-time home buyer program as irate city leaders took a stand Wednesday against the newest state budget proposal. "We condemn the illegal and irresponsible budget scheme," Vacaville Mayor Len Augustine emphasized to the media crews and supporters in attendance at the press conference at the steps of the Vacaville Police Department.

Flanked by leaders from cities across the county as well as county government representatives, Augustine said, "We're being victimized by the out-of-touch, out-of-control, self-serving few."

Vacaville city leaders announced Wednesday afternoon that because of measures at the state level, which would take money from redevelopment agencies, Vacaville's Housing and Redevelopment Department is suspending its First-Time Homebuyer Down Payment Assistance Loan Program until further notice.

The loan program funding for Fiscal Year 2009-10 was $500,000, which was expected to fund between 33 to 35 loans. Four applications that are already being processed will be completed, but no new applications will be accepted, city leaders said.

The current state budget proposal calls for a total of $1.7 billion in cuts to Housing and Redevelopment agencies in California, with $1.3 billion in fiscal 2009-10 and another $350 million in 2010-11.

Vacaville is bracing for a state take-away of anywhere between $5 million to $9.5 million in redevelopment funds alone.

City Manager Laura Kuhn said any money taken from redevelopment puts the city in a difficult spot. She explained that funds will have to come from somewhere else to pay off loan debt that was designed to help with housing projects for rehabilitation and low income families. The state also is looking to Vacaville for $1.9 million in property tax revenue and $1.6 in gas tax funds.

"It's a slap in the face," Augustine said. "It really is stealing our money and it's about time Sacramento got its act together."

Many leaders described the actions of the "Big 5" - Gov. Arnold Schwarzenegger and the four legislative leaders - to close the $26.3 billion shortfall a "Ponzi Scheme" and a "funny money strategy."

Solano County Supervisor Mike Reagan said the Big 5 are sidestepping their responsibility and urged the state leaders to get back to work to solve the entire problem, not just part of it.

From the county, if the state budget is passed, $11 million in Proposition 1A (local property tax revenue) will go to the state along with $5.3 million in gas tax money.

Fairfield Mayor Harry Price agreed that the takeaways are outrageous.
"The gang of five need to be scrutinized with greater care," he said. "It's a deal that was hatched in secrecy."

"Who picks up the slack when the state fails to meet its obligations?" he said. "That's right. We do."

Fairfield could lose upward of $2 million in property tax and $3.1 million in gas tax.

Price recalled that some $54 million of Fairfield's property tax revenue has been taken by the state since 1990.

Dixon isn't faring any better and could lose $464,488 under Proposition 1A, which would create a budget shortfall of $1.6 million for the city and another $296,449 in gas tax takeaways.

Still, different proposals are being discussed about Redevelopment Agencies around the state. Under one scenario, Dixon would lose $632,000, which according to City Manager Nancy Huston would kill the agency altogether.
"Redevelopment would be wiped out," she said.

The city of Benicia would lose a total $1.7 million in property and gas tax takeaways. It does not have a redevelopment agency.

Many leaders are on board for going to court to challenge the state, however, they acknowledge that the state may still require the money up front.

Assemblywoman Mariko Yamada, D-Solano, attended Wednesday's press conference.

"The message is clear," she said. "I take what was said very seriously. The state should be partners with local governments and special districts to deliver those vital services that citizens expect and this is not the way to do it."

http://www.thereporter.com/ci_12898374

[rj1]

Re: CA budget deal goes boom

Stop borrowing money.

The day governments stop trying to borrow money to pay their bills is the day I grow gills and become a fish.

[kartius919]

Re: CA budget deal goes boom

Then we are destined for heartache.