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California Crisis Continues: State to Run out of Money in March

Posted by B. Daniel Blatt at 7:15 pm - January 31, 2012.
Filed under: Big Government Follies,California politics

If the states are laboratories for democracy, as Justice Louis D. Brandeis once wrote, then Americans in the forty-nine largest states should be grateful for California.   Since Jerry Brown first became governor (in 1975, not 2011), the (once-)Golden State has often shown us what policies don’t work.

The state is running out of money:

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.

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.

The once-and-current governor is a Democrats as are both house of the state legislature.

(H/t: The Gateway Pundit.)



  1. Maybe they can ask Obama for some more “stimulus?”

    Comment by Sebastian Shaw — January 31, 2012 @ 7:19 pm - January 31, 2012

  2. Another triumph of the Progressive Blue-State model.

    Comment by V the K — January 31, 2012 @ 8:45 pm - January 31, 2012

  3. Why don’t they cut spending? Not enough votes (Republicans in the minority in both houses). Why don’t they raise taxes? Not enough votes (as per Proposition 13, that requires a two-thirds majority). Why has the state been sliding towards bankruptcy since the 70s? Because of a beast that cannot be starved and those who insist on trying the same tactic expecting different results.

    Comment by Serenity — February 1, 2012 @ 3:13 am - February 1, 2012

  4. One notes that the California Legislature placed a higher priority on mandating Gay and Lesbian indoctrination in the public schools than addressing their fiscal DOOM in their latest session. And Governor Moonbeam retains his obsession with his High-Speed-Train-to-Nowhere, to the exclusion of all reason. And, despite being broke, the Assembly somehow found the time and money to extend in-state tuition and financial aid to illegal immigrants.

    And yet the Democrats who run the state insist that just one more tax increase… just one more!… is all they need to fix the problem. It didn’t work in Illinois.

    Comment by V the K — February 1, 2012 @ 5:53 am - February 1, 2012

  5. Speaking of Illinois

    “Failure to address unsustainable trends in the state’s pension and Medicaid systems will only result in financial disaster for the state of Illinois,” said Laurence Msall, president of the Civic Federation, the financial government watchdog group that produced the report.

    Illinois’ fiscal woes and reliance on one-time revenue measures, such as borrowing, have made the state a riskier investment in the U.S. municipal bond market, where it has issued billions of dollars of bonds to make pension payments. Earlier this month, Moody’s Investors Service cut Illinois’ credit rating to A2, the lowest rating among the states it rates.</blockquote

    Comment by V the K — February 1, 2012 @ 9:02 am - February 1, 2012

  6. Ah, but you see, Pomposity, you already bleated and squealed that you could not pay a penny more in taxes — and that having to pay more would mean you couldn’t afford a place to live, food, etc. Indeed, you made it quite clear that higher taxes would be bad for the economy because it would drain off money that you could spend on other things and thus “stimulate” the economy.

    So again: “progressives” like yourself and your Barack Obama Party want massive increases in government spending without tax increases.

    Conservatives want to cut government spending AND cut taxes.

    So you’ve pretty much completely outed yourself as a hypocrite on that one. You don’t want to pay taxes, you don’t want to work, and you want money to be taken from those who do to finance your welfare.

    That makes you a leech and a parasite.

    Comment by North Dallas Thirty — February 1, 2012 @ 10:13 am - February 1, 2012

  7. NDT, there are only two things the Democrats want to cut 1. The Military and 2. Nothing else. All of their “compromises” are based on immediate tax hikes now, and a promise that someday they will cut spending. But someday comes and the cuts never happen.

    Comment by V the K — February 1, 2012 @ 11:43 am - February 1, 2012

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