Wildfires in California are costing a bundle to fight. Image: Flickr/ Rennett Stowe

In Sacramento this morning, Governor Arnold Schwarzenegger declared a state of emergency in Kern County. The Tehachapi fire, which is officially known as the West Fire, is 25 percent contained. The Bull Fire is only 5 percent contained. The State of Emergency allows cash-strapped California to spend money on firefighters and containment.

About the Tehachapi Fire

The Tehahapi Fire, centered in a small community 10 miles south of Tehachapi, started on Tuesday. Residents of the Old West Ranch were evacuated after the blaze started. The fire has been officially named the West Fire, after the ranch that was split up to form the community. Residents who were cutting scrap metal with a grinder in dry grass started the fire. At least 40 homes have been burned, and about 1,400 acres have been scorched. Approximately 150 other homes are threatened.

About the Bull Fire

The Bull Fire, centered north of Kernville, Calif., is currently burning almost 16,000 acres. Eight homes and six outbuildings burned in just the first day of the fire. Two firefighters have already been injured while fighting this fire. The cause of the Bull Fire has yet to be determined, and it is only about 5 percent contained.

The cost of fighting wildfires

In budget-strapped California, fighting wildfire is an incredibly expensive proposition. Not only the human cost of possible firefighter deaths, but the financial cost. Fighting a big fire can cost anywhere from $1 million to $2.5 million a day. An “average” wildfire fighting year for the U.S. Forest Service costs $500 million or more. The cost of fighting wildfires in California falls to several agencies. The majority of the cost is carried by the California state budget. This is just the cost of fighting the fire — never mind the damages to property and land. The State of Emergency means that California can spend the money before they actually know where the money is coming from.

Until legislators in the Sacramento capital building create a balanced budget, state employees may have their pay cut. Image from Flickr.

In the state of California, where a state budget has yet to be passed, state employees are facing a huge pay cut. The governor has asked that until a budget is passed, all employees have their pay cut to minimum wage. Some banks and credit unions are offering a quick payday to these employees, including no-interest installment payday loans.

The California pay cut

At the beginning of the California fiscal year on July 1, the state had passed no official budget. Without the budget in place, the state of California is facing a $19.1 billion budget deficit. Governor Arnold Schwarzenegger ordered that all 200,000 state employees have their wages reduced to minimum wage until a budget is passed. State Controller John Chiang issued a statement saying that worker wages cannot be reduced until the state budget system is completely overhauled — something that will take at least two years and several million dollars.

“Impasse” loans offered

Several large banks and small credit unions, including Wells Fargo and Bank of America, are offering no fax pay day loans called “budget impasse loans.” These loans are offered for no interest and no credit check. Instead, state employees are extended extra credit or cash money to make up the gap. When the state budget is passed, employees will be given a retroactive payment that they can use to pay off these impasse loans.

Qualifying for impasse loans

California state employees who need to get a personal loan to cover the budget impasse do not immediately qualify for these zero-interest loans. Instead, the state employees must already have an account with the bank or credit union. For many of the financial institutions, the state employee’s pay must also be deposited directly into his or her bank account. Given that California has only passed a balanced budget by the beginning of the fiscal year in 10 of the last 34 years, it is not surprising that many banks have created solutions to help employees that are left in the dust.

The California budget crisis 2010 is forcing Gov. Arnold Schwarzenegger to make deep cuts in programs for the poor, but he vows not to increase taxes. Picassa Web Albums photo.

The California budget was released by Gov. Arnold Schwarzenegger Friday. It outlines bleak fiscal realities for the government of a state that is out in front with most national trends. Decades of tax revolts and governing at the ballot box have converged with the Great Recession to create the California budget crisis of 2010.

The California budget deficit

In attempt to close a $19 billion California budget deficit in the fiscal year beginning next month, Schwarzenegger sounded like he could use a quick personal loan. He called for deep cuts that include a welfare to work program that would affect 1.4 million people, two-thirds of them children. The Associated Press reports that the Republican governor laid out the most severe cuts to health and welfare programs since the recession started fueling the California budget deficit nearly three years ago. He said cuts to government services over the past few years have done away with the “low-hanging fruit.”

California budget crisis 2010 and Medi-Cal

Even with the deep cuts announced Friday, the California budget crisis of 2010 may continue to get worse — thanks to health care reform. The Sacramento Bee reports that California’s Legislative Analyst’s Office found that as many as 2 million more Californians could become eligible for Medi-Cal coverage after the federal health reform law takes effect. Medi-Cal is California’s Medicaid program. The health reform law calls for the federal government to cover initial costs for newly eligible enrollees, but the expanding program is expected to add its toll to California’s shrinking budget.

California budget bad news

California budget news is bad. Low tax revenue is severely worsening California’s budget deficit. The state’s 12.6 percent unemployment rate ranks among the highest in the nation. In April, revenue from personal income tax was $3 billion less than projected. The state’s general fund spending will be $83.4 billion for the new fiscal year, the lowest level in six years. The $19 billion deficit accounts for more than 20 percent of all projected spending.

More bad news for California budget

Spending cuts are the only solution being considered for balancing the California budget. Schwarzenegger
and Republican lawmakers have vowed not to raise taxes. CalWORKS, the state’s welfare-to-work program that was cut Friday, helps single mothers find child care while they go to school to learn new skills. Children from low-income families, the disabled and seniors who rely on state services are bearing the brunt of California’s budget crisis.

California budget showdown looming

The California budget has been affected in recent years as Schwarzenegger and Republicans won a series of corporate tax credits and giveaways, costing the state treasury an estimated $2 billion per year. As reported on taragana.com, Democratic leaders responded forcefully to the latest California budget proposal, saying they will not allow programs for the needy to be gutted. It’s not clear how those programs will be sustained without a tax increase.