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California Fiscal Calamity Still Unsolved

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The state Assembly has a plan it insists will help, but Gov. Schwarzenegger is adamant: he wants all (a solution to cover the state's entire deficit) or nothing at all.

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The L.A. Times reports on Schwarzenegger's dissatisfaction:

The state Assembly on Thursday approved $5 billion in budget revisions intended to keep California from having to issue IOUs next week, but Gov. Arnold Schwarzenegger quickly declared the package inadequate and vowed to veto it.....

As lawmakers debated, the controller and the state treasurer issued a joint statement warning that IOUs -- if made necessary by California's cash crunch and the continuing lack of a balanced budget -- would cause "substantial, long term damage" to the state's standing on Wall Street.... But Schwarzenegger said the $5 billion in budget revisions, which could avert IOUs for much of July, "amounts to nothing more than a piecemeal proposal."

"Since the first day we began working to solve this $24-billion deficit, I have been clear: The Legislature must solve the entire deficit," he said....

The Times article goes on to explain how many details of state spending are influenced by things other than just decisions lawmakers in Sacramento try to make--like lawsuits over things like prisoner healthcare and wage cuts to state unionized employees.

For some insight into the political complications surrounding Sacramento's attempt to do anything that local and county governments perceive as interfering with their prerogatives, see these stories from PublicCEO, on cities and counties mad that the state might raid gas taxes and redevelopment funds that customarily belonged to them.

Past City of Angles blogging on the state's ongoing fiscal crisis, and the reasons for it, here and here.

The image associated with this post was taken by Flickr user d_vdm. It was used under user Creative Commons license.

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