California state budget now shows a $27 billion deficit

Forums: Money, California State Budget, State Deficits
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What seems like simple logic is that with the economy in a worsening state, the state will continue to lose tax revenues. They're trying to plug a current $27 billion dollar deficit, but that's the wrong approach to fix the state's finances. They must cut more cost than the current $27 billion, because with our economy in a down trend, tax revenue will also decrease more than plugging $27 billion today.

The only option they have is to cut the state's payroll. It's that simple, but they don't like to lay off workers, so they continue to play numbers games without accepting the pain today for a worse tomorrow.

California's credit rating has been dropped to almost junk bond status, and borrowing will also cost the taxpayers more money just to pay interest on the bonds. Where do they think this money will come from? Playing numbers games only exacerbates the problems, and it gets worse the longer they wait.

They have no common sense or any financial management sense. They must love to increase all our pain for the future.

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Type: Discussion • Score: 7 • Views: 2,929 • Replies: 29

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@cicerone imposter,

Arnold is going to chip in something from his movie residuals [what are they called for movies?] to help the cause.

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The California government has been in gridlock for many years, since long before Arnold was elected. How do you get a working arrangement from people who disagree about virtually everything?

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@cicerone imposter,

California is an exceptionally wealthy state. Another option would be to increase taxes. I know that's not popular, but cutting payroll by 500,000 people would mean that government services would stop and unemployment would skyrocket. Of course $500 / person tax increase wouldn't go down well either. It looks like some of both might be a more feasible option.

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@engineer,

How many services have been cut?

Are all service costs absolutely necessary?

Is each agency running at top efficiency?

Until and unless the above are reconciled, how can anyone just accept raising taxes as the only solution?

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@engineer,

That's the crux of our problem; the politicians in Sacramento doesn't know how to compromise. We continue to elect dummies who act like children, and their inability to compromise costs our state untold millions in extra cost. We need to stop paying their salaries, because they're not doing their jobs.

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@Yankee,

That's the 64 thousand dollar question; I believe no service have been cut.

During the past years when our economy was very good, that state legislators and Arnold increased state spending by about 35% every year over revenue. Those increases could not be sustained by any household or government, but the dummies in Sacramento knows how to spend but don't know anything about fiduciary responsibility. They never saved for that rainy day when times were good.

We now have huge deficits every year, and they're not ready to cut state employees pay or benefits, so they play games like reducing the number of hours worked to reduce cost for 230,000 state employees. They must learn to cut at least 15 to 20% of their staff/cost - or about 34,500 employees. They were considering cutting 5,000. They never learn.

The state has now increased the state's payroll taxes for those working by bringing in cash faster - which must eventually be paid back. Games.

They're cutting education and health insurance for our children. Their priorities are all screwed up!

I'm afraid they'll never learn.

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@cicerone imposter,

The irony is what you say is that it is the voters who either forget, do not know or do not care when they re-elect these "dummies" time and again.

I saw a poll that said something to the effect that most people look unfavorably at their State reps, but support their local Rep.

Odd results.

1 Reply

@Yankee,

It's more than odd; we're all stupid! We should have "controlled" Sacramento with our voting, but we bring back the same dummies year after year. We have found the enemy, and ........

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@cicerone imposter,

cicerone imposter wrote:

We now have huge deficits every year, and they're not ready to cut state employees pay or benefits, so they play games like reducing the number of hours worked to reduce cost for 230,000 state employees. They must learn to cut at least 15 to 20% of their staff/cost - or about 34,500 employees. They were considering cutting 5,000. They never learn.

But your problem is bigger than that. Let's say those employees earn $75k including benefits. Cutting 34,500 employees dumps all those unemployed people on the economy and saves... $2.8 billion/year in salaries. That's a hugh amount of money, but only a tenth of what you need and you have to pay them unemployment for a while. Unless your legislature gets in gear, California bonds will be junk status in a few months.

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@engineer,

What you say is true, but there are more than staff cuts that must be considered. Many programs must also be cut, but their priorities are wrong. They shouldn't be cutting school or health insurance for our children. However, many other social programs that are "give-aways" should be terminated. They haven't learned to prioritize cuts based on what they added more recently as "social programs." We've survived before they have established all those extra programs costing billions.

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@cicerone imposter,

I'm surprised some citizen group hasn't proposed a bi-partisan budget that suggests those cuts. CA is big, but a focused effort should be able to go through the budget line by line and remove that which can be removed. What is left has to be paid for with higher taxes.

1 Reply

@engineer,

That's the simple solution that seems to escape everyone in Sacramento.

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@cicerone imposter,

CA has issued IOUs in place of checks, and many will be short of money. When they go to cash their checks at check cashers, they take a fee out of the IOU, so they end up with less. Those jokers in Sacramento should also be paid by IOUs.

Quote:

California IOU holders may turn to check cashers
California "IOU" recipients can turn to credit unions and check-cashing storefronts if a state budget deal does not appear by Friday and if three major banks refuse to accepting the notes beyond Friday as planned, analysts said on Tuesday.

1 Reply

@cicerone imposter,

ci wrote :

Quote:

The only option they have is to cut the state's payroll. It's that simple, but they don't like to lay off workers, so they continue to play numbers games without accepting the pain today for a worse tomorrow.

instead of laying off workers , why not change the workweek ?
i read where some cities/companies have staff work four days a week - but some work monday to thursday , others wednesday to saturday . apparently that has worked to the satisfaction of many city workers and residents .
it sems that many workers like a four-day workweek , and many residents can see city staff on saturdays .

isn't that what's called " thinking outside the box" ?

one of many articles on this subject :

http://www.oppapers.com/essays/Modified-Work-Schedule/74377

Quote:

Modified Work Schedule
Abstract
When employees are satisfied the organization benefits in many ways in that satisfied employees are more committed to the organization. They are likely to have less absenteeism, fewer grievances or engage in negative behavior. Thus by ensuring that employees are satisfied, management stands to gain a more efficient and smooth running organization. Given the benefits of high job satisfaction, companies are constantly coming up with new ways to increase and improve job satisfaction on the job. In an effort to increase job satisfaction more and more companies are experimenting with different approaches to work hours and workweek. The purpose of this paper is to examine the benefits and challenges of the major types of modified work-schedules available to workers.

( btw the swedes often work longer hours in the winter but shorter hours in the summer - nothing unusual )

1 Reply

@hamburgboy,

They've already implemented cutting hours for state workers, but it's not nearly enough! They do things in peace-meal style, and it fails to impact the budget as tax revenue drops at greater speed than the savings from cutting hours. They must fire people to cut them off from the "total" expense for salaries and benefits which includes retirement benefits.

1 Reply

@cicerone imposter,

cicerone imposter wrote:

Those jokers in Sacramento should also be paid by IOUs.

I think you might be onto something, here. Not going to happen, though.

1 Reply

@roger,

We also know that!

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@cicerone imposter,

ci wrote :

Quote:

They must fire people to cut them off from the "total" expense for salaries and benefits which includes retirement benefits.

but do you really want the unemployment to go even higher ?
is there no better solution than higher unemployment ?

(i'm glad ci didn't own the company i worked for - i'd be on welfare now - that sure wouldn't be any fun at all .
i say " "live and let live" )

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@hamburgboy,

Not true! When I worked in management, I made sure we always put some money aside for that rainy day. That created not only more opportunities for the companies/organizations that I worked for, but it ensured more stability of employment for all its workers.

What we are talking about here is the state government that continued to increase expenditures by 35% over revenue even while tax revenues continued to increase. That is irresponsible financial management; they never prepared for the downturn in the world economy - and the impact of reduced tax revenues - not only at the state level, but also at the local city and county levels of government.

Sloppy management usually end up having to do the drastic stuff we now face. The state should never have increased their staffing at the rates they did while things were hunky Dorry. They must now pay the piker.

If the companies I worked for maintained the conservative fiscal management style I implemented, they can now reduce their costs (somewhat) by reduced hours and probably not have to lay off anyone.

1 Reply

California state budget now shows a $27 billion deficit

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