California Crisis Deepens - Are Other States To Follow?

THE STATE EMPLOYEES UNIONS HAVE SUCKED YOU DRY, YES YOU THE HARD WORKING EMPLOYEE OF A PRIVATE COMPANY, YES YOU A RETIREE, YES YOU WHO WORK FOR A LIVING WITHOUT THE BENEFIT OF SHAKEDOWN UNIONS REPRESENTING YOU. YES YOU WHO ARE NOW PAYING FOR THE BANKRUPT FEDERAL GOVERNMENT AND YOUR BANKRUPT STATE LEACHED TO DEATH BY THE UNIONS WHO MAKE 50% MORE IN WAGES THAN WHAT A PRIVATE COMPANY WOULD PAY. THEY EXTRACT YOUR HARD EARNED MONEY VIA TAXES, PAYROLL, SALES, REAL ESTATE, ESTATE TAXES, CITY TAXES. WAKE UP AMERICA, IT IS NOW TIME FOR THE NEW BOSTON TEA PARTY. 

Today is the day Californians begin to personally feel the pain of the state's massive budget gap. As Gov. Arnold Schwarzenegger and top legislative leaders continue to meet behind closed doors to hammer out a plan covering the current $16 billion gap-projected to grow to $42 billion by June, 2010-the state controller is delaying $3.5 billion in payments to conserve cash.

A self-imposed deadline for coming up with a budget deal by this weekend came and went, with no word on how close all sides are. Democrats, who control the legislature, have proposed a package of massive cuts and massive tax hikes. Republicans, which have enough votes to

torpedo any budget deal, will only agree to the tax hikes if there is a hard spending cap to prevent future crises. And the governor wants to make sure the resulting package has enough stimulus programs to spur jobs creation projects. This includes easing some environmental review requirements, which Democrats have balked at.

California is hardly alone. Wisconsin is facing its largest shortfall in history, $5.7 billion, and the Wisconsin State Journal says the state's rainy day fund only has enough cash to run operations a day and a half.

Kentucky lawmakers have been meeting for weeks to figure out how to close a budget gap nearing half a billion dollars. Arizona just cut a deal on handling its $2 billion deficit, the worst situation the state has been in since 1929. But Alabama, Florida, Rhode Island, and Utah all have budget gaps which equal more than 10 percent of their general fund.

And New York City, which nearly went famously bankrupt in the 1970s, now is struggling to close a $4 billion gap. That's $4 billion for New York City. Not the state.

They all pale, though, in the shadow of California's gaping chasm of debt. The Golden State is still taking in plenty of money daily from taxes, but the controller says the state needs to keep a cash cushion of $2.5 billion, and that has dwindled to zero. (see chart)