Loans, taxes, spending cuts to aid debt
Governor Arnold Schwarzenegger
The California Senate has finally agreed on a budget that closes the state’s $42 million budget shortfall through short term loans, tax increases and spending cuts.
The Assembly approved the budget minutes after the Senate, and now the budget only awaits the governor’s signature.
Final approval
After suffering through a stalemate, declaring a state of emergency and sending layoff notices to 10,000 state workers, California Governor Arnold Schwarzenegger is sure to sign. With 276 public works projects in jeopardy, the state will need a few short-term loans to balance the budget.
A little give
After the state budget failed to pass by one vote Monday, lawmakers didn’t have much choice but to give in to one Republican senator’s requests. California law mandates a two-thirds majority to pass the budget. Sen. Abel Maldonado agreed to pass the budget after senators voted for a measure to allow open primaries and removed a 12-cent additional gas tax increase.
Touting unity
One of California’s U.S. Senators was there to urge lawmakers to push the budget through despite disagreements.
“We have to put aside all this ego and put the people of California first. The people of California do not deserve the fate they will receive if it is not passed,” said U.S. Senator Barbara Boxer, D-Calif.
Barbara Boxer
Boxer reminded her Democratic constituents that on a federal level, Democrats also had to give in to some Republican demands in order to get the $787 billion stimulus package.
Beg, borrow and tax
California’s new budget includes increases in income tax, sales tax and vehicle licensing fees. Overall the state is making about $15 million in spending cuts.
In order to close up the rest of the budget gap, California will need about $11 billion in short term loans, and it is banking on support from the federal government.
It’s a shame that the state has to raise taxes and make drastic spending cut, but I think it’s absolutely necessary especially with the way things are going. Citizens of California are already struggling and I’m certain this will only make it a lot more difficult for the people to make ends meet. But just like many of us, they must also make sacrifices. Times like this, they must immediately go after the big catch before the problem progresses into something irreversible.
It’s good they got moving on that account. It’s unfortunate that they had to raise taxes in order to do it, but the fact of the matter is that you can’t get rid of a $42 billion shortfall spending cuts alone – it’s simple math. There is a definite point at which dropping expenditures just isn’t enough, you need to augment income.
If the massove changes in the State Employees Retirement Rules that were never approved by voters or citenzens in any way are analyzed, it is clear that the budget problem is insolvable unless these rules are changed. Specifically the retirement age at which time employees can start their retirment pay is illogical. If the rules are changed to require State Employees to be 55 before they receive any retiment pay the budget would be in balance and the employee would be treated fair.