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California in an 'unprecedented' fiscal crisis

Original post made on May 21, 2009

"It's grim. There's no other word for it," State Senator Joe Simitian, D-Palo Alto, summed up the economic catastrophe California faces in the wake of the overwhelming voter defeat of a package of budget-related propositions Tuesday.

Read the full story here Web Link posted Thursday, May 21, 2009, 9:18 AM

Comments (25)

Posted by Chuck, a resident of Midtown
on May 21, 2009 at 10:46 am

Once again Sacramento tried to get voter approval on poorly conceived state propositions that would create more problems than they were written to solve. Lawyers and accountants couldn't figure them out.

I see it now. The special election was designed to be defeated from the start so Sacramento can now blame the voters for the financial crisis.

It's another way our State Legislature avoids their responsibility.

Not sure? Read the headlines.

Posted by Resident, a resident of Another Palo Alto neighborhood
on May 21, 2009 at 10:57 am

High Speed Trains and Low Speed Schools R Us. Senator Simitian, I hope that cancellation of the fanciful plans for a luxury high speed rail is on the top of the projects to cancel list.

Californian's value their schools more than a new HSR system - voters weren't presented with that choice during the NOV08 election. And this weeks election shows that Californian's want to see cuts across the board - they don't want california to keep mortgaging their kids future.

Many claim that federal stimulus dollars for high speed rail will be good for the state - but if the feds throw a few Bil at CHSR, all it does is give us a tiny down payment on a hugely expensive project, that will commit the state to a long term debt and huge new permanent operating cost that we can not afford.

Californian's may have approved the authorization of bond funding for HSR - but only if the project makes fiscal sense. Measure 1A was NOT a DEMAND from voters to go forward with high speed rail at any cost. Californian's have not chosen HSR over schools.

Since the main argument for pushing HSR seems to be to attract federal HSR stimulus funds - California needs to attract federal stimulus funds for "high speed rail" to make incremental improvments to our existing rail lines that incrementally improve speed, safety and service levels. This would be an excellent use of federal stimulus dollars without committing California to a long future of expensive HSR.

Posted by edbeards, a resident of Crescent Park
on May 21, 2009 at 10:58 am

The Economist magazine has it right. Calif. is broken. We need to start over with a new state constitution. Minority rule and propositions are no way to run a state.

Web Link

Posted by Peter, a resident of Portola Valley
on May 21, 2009 at 11:11 am

I would have liked to help the legislature, but guess what? To quote Mr. Simitian, "The money simply isn't there"! It's hard to believe that last Fall our elected officials couldn't see this coming. Not that the electorate didn't blindly obligate themselves as well. You can't vote money into existence. We've borrowed our way into this hole approving just about every bond and spending initiative that's come our way. We're now left with cleaning up after the party with a hangover. Citizens, like consumers, will be forced to do without. Voters and the legislature share the blame.

Posted by chris, a resident of University South
on May 21, 2009 at 12:03 pm


nice thoughts but a new state constitution would take years to draft and get approved -- and with all the infighting could easily go down to defeat. By that time, California will have long gone bankrupt.

How about some pragmatic solutions for implementation NOW?
Get out of your ivory tower and get real.

Posted by chris, a resident of University South
on May 21, 2009 at 12:04 pm


You have it right as far as you go. But you did not tell us what we are going to do without.

Posted by Chris Zaharias, a resident of Crescent Park
on May 21, 2009 at 12:07 pm

I am overjoyed to see that the state will now have to make realistic choices between a liberal agenda filled with huge sink-holes of money going into environmental and social engineering projects, and more important priorities such as schools and infrastructure.

Global warming-related regulations: no longer important or viable
Over-extended social welfare: no longer important or viable
Overly burdensome environmental regulations: no longer viable
Sky-high business taxes: no longer viable as industries feel CA en masse

This is a great day for the State of CA!

Posted by Alex, a resident of Fairmeadow
on May 21, 2009 at 12:28 pm

The first place the state should start looking for excess money is in their own pockets. All the state legislators should be required to take a pay cut, a cut in the number of staff required for each legislator, and a cut in the allotted daily expenditure.

Many California's are doing the same to cope with the economic downturn so why not our legislators as well.

Posted by liberty, a resident of Downtown North
on May 21, 2009 at 12:31 pm

At first glance it seems like they will have to make major cuts. But they won't. They will threaten us with things like:

letting 40,000 inmates out of prison
laying off 100s of thousands of police, firefighters, and teachers

They should be cutting the funding for sea otters, high speed trains, and other non-essential things. But those kinds of cuts won't scare us. They need us scared so we will let them raise taxes so they can spend more. Don't believe their scare tactics. Write to Simitian and tell him we want real spending cuts, not scare tactics.

Click this link to email him:
Web Link

Posted by pat, a resident of Midtown
on May 21, 2009 at 12:39 pm

You're right, Liberty. They scare us by saying they'll cut essentials like public safety and education. Sounds just like our Palo Alto government. Meanwhile, salaries and benefits are sky high, and our tax dollars go for stuff like the color of Palo Alto, senior games, and plaques at city hall.

Posted by mindful, a resident of Barron Park
on May 21, 2009 at 12:51 pm

agree with pat, city of palo alto has yet to offer any plan to save money. city workers already only work 4 days a week, have salary & benefits packages that are better than most private companies in the area (and that is pretty generous considering the companies in our area!), and get incredibly generous pension. sorry, did i inadvertently settle in france??

Posted by chris, a resident of University South
on May 21, 2009 at 1:11 pm

Tom Campbell's plan is to cut state salaries 15% and implement a 32 cent / gallon gas tax.

Posted by Don G., a resident of Community Center
on May 21, 2009 at 1:33 pm

Get back to basics on what a state government should be doing.

Public Safety
infrastructure projects

This situation is going to call their bluff on cutting "essential" programs. It's time to end the welfare state. It's time to face reality that there is no global warming (California's cleaner than any time since I've lived his since the early 60's). It's time to utilize the state for what benefits it has (timber, oil, entertainment, agriculture, and great weather). It's time to get companies to come BACK to the state through incentives and revitalize our economy. We're smarter than this! The state and the politicians can't be everything for everyone. Stop fooling around with stupid legislation for making a special day to recognize a gay man.

Posted by Walter_E_Wallis, a resident of Midtown
on May 21, 2009 at 4:23 pm

Walter_E_Wallis is a registered user.

Don G for governor!

Posted by Paul, a resident of Downtown North
on May 21, 2009 at 5:00 pm

"All the state legislators should be required to take a pay cut, a cut in the number of staff required for each legislator, and a cut in the allotted daily expenditure."

Here in 31 words is irrefutable evidence of the failure of universal education.

What caused this problem is knee-jerk ideology like this. We need good ideas, but we got silly non-solutions. We need clear thinkers, but we got demagogues with empty slogans, and mindless minions parroting them.

Posted by chris, a resident of University South
on May 21, 2009 at 6:09 pm

Instead of all the blowhard comments, let's hear some comments on Tom Campbell's specific plans.

Posted by rick, a resident of Adobe-Meadows
on May 21, 2009 at 7:24 pm

But blowhard comments are so fun to make....... the people of California are too stupid to elect somebody like Tom Campbell - his suggestions make too much sense.

Posted by Reality Check, a resident of Midtown
on May 21, 2009 at 9:03 pm

Don G:
Get back to basics on what a state government should be doing.
Public Safety
Infrastructure projects

Uh, Don, we're in this mess because of the first two (education and prisons dominate the state budget).

And by the way, if we don't stop global warming, you can forget about CA's ag, timber and great weather resources you cite above.

So stop with the red herrings (worrying about gay men) and face reality already.

Posted by Perspective, a resident of Midtown
on May 22, 2009 at 7:34 am

RC "Education and Prisons dominate the state budget" ???? HAHAHAHAHA

Please give us a link to the State budget YOU are reading!

What on earth causes you to think that education and prisons are more than 50% of our state budget? Not to mention education and prisons for LEGAL residents?

Posted by Perspective, a resident of Midtown
on May 22, 2009 at 7:37 am

The reason, RC, that your statement doesn't even begin to pass the smell test is because other states are NOT in the red, yet manage to educate their kids better than we do ours, and imprison their criminals...So, patently, we can easily conclude that we are NOT in this mess from education and prison costs.

Not coincidentally, the highest taxed States in the nation are the ones who are the most in the budgetary red. Nothing like driving away the taxpayers and the businesses to make a great State budget

Think about it.

Posted by chris, a resident of University South
on May 22, 2009 at 1:43 pm

More than 50% of the state budget is spent on education alone.

What is PERSPECTIVE talking about?
Also, most states are in deficit now.
With your lack of knowledge, you should have your own taxes
increased to pay for your remedial education.

Posted by Reality Check, a resident of Midtown
on May 22, 2009 at 10:34 pm

Out of about a $100 billion budget, $52 billion goes to schools ($50 b to K-12, $12 b to higher ed) and $10 billion goes to prisons and related (corrections and rehabilition).

Go here and click on the summary chart to educate yourself, perspective, before blowharding your political views:
Web Link

Posted by susan, a resident of another community
on May 23, 2009 at 10:54 am

The education budget is so high because we educate to many kids who do not legally belong in the U.S. 70% of the kids in my kids school their first lanuage is not English. A large amount of money the school spends is teaching the kids English. The teachers who teach these classes make 1/3 rd more then the other teachers. The schools scores are based on the Star testing. So the school has to spend alot of time on the non English speaking kids or the school will be closed because of low test scores.Yet when ,I asked for my honor student daughter to be taught spanish they said no. This system is wrong. Until someone has the guts to fix it, Ca. will remain a mess.

Posted by Perspecitve with Mud on my Face, a resident of Midtown
on May 23, 2009 at 5:23 pm

my bad, I didn't consider the post-grade 12 spectrum for education funding, nor did I consider including all of the retirement funds of teachers, the salaries of maintaining the Dept of Education in California etc (Web Link)

This is what happens when I open mouth without coffee and thought...there is more to education than through 12th grade, and more to education than teaching today's retirement etc.

Yup, out of a 135 billion, about 40 billion is k-12. Another 20 billion goes to post grade 12. Another 10 billion to corrections.

I stand corrected, indeed about 1/2 of our budget is "education and prisons".

Does negate my horselaugh, with a great deal of mud on my face, given that "dominate" can safely be said to mean "more than half", but doesn't negate anybody's points about more money not being the solution to the education issue, nor does it negate the points about the costs of imprisoning, educating ( or providing health care to) people who are here illegally..

Posted by Sharon, a resident of Midtown
on May 27, 2009 at 10:49 am

"Now comes the matter of California.
Governing by apocalypse is the only option left to the Governator, who cannot get the Democrats to accept budget cuts and could not persuade the electorate in this week's referendum to accept tax increases.
The state's misery should be kept in perspective, though.
The state's 25-year bonds yielded 6.43% in late March, and yesterday yielded 5.6%.
Like the UK, a deterioration in state finances doesn't portend anything like default.

Nonetheless, there is only so far that the bandaids can stretch.
For the US government to spend more to bail out states or industries or banks, it must persuade the Fed to extend its balance sheet, which means that eventually America itself will be in the same position that UKalifornia is in.
Governments will have to cut spending, which means that consumers will cut spending, which means that the economy will crawl along its L-shaped recession path indefinitely".Web Link

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