California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.
The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June. Oops
But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year. Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on. Bullshit planning? Business revenue flight? Wishing on a star for cash?
The Assembly budget committee approved a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors. Seriously, who the bloody hell would invest in California anymore?
Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiang estimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.
With such actions, Chiang believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang also said that "more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates." AKA, if we continue to spend like drunken sailors and we don't get the money from robbing the "rich" like we want.
California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.
The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June.
Surprising. I do not think that word means what you think that word means...
But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year.
So Jerry and the Clowns were over-optimistic on revenue...
Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on.
...and they failed to get spending under control. Yep, I can see why everyone is so surprised...
The Assembly budget committee approved a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95.
Thus moving money from one pocket to another...
Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.
Thus stiffing the vendors, who are forced to do business with the state anyway...
Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiang estimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.
With such actions, Chiang believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang also said that "more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates."
And golly, what are the chances of that?
California borrows money early each fiscal year because the state has regular monthly expenses but receives the bulk of its tax revenues in the spring. The state borrowed $5.4 billion last fall for this purpose.
Assemblyman Bob Blumenfield, D-Woodland Hills, downplayed the significance of the new borrowing in a hearing. He said $5.4 billion was small relative to the $10 billion state leaders were prepared to borrow last year.
That doesn't make the amount 'small'...
Some Republicans raised questions about when the borrowing from state accounts from would be paid back and why the state is spending more than expected.
The Pubs are in the minority, and thus know the Dems won't touch that last one, except to say that "it's for the children" and "it's for green jobs" and "it's for high-speed rail something else"...
Michael Cohen, chief deputy director of Brown's Department of Finance, said the state would pay back special funds whenever programs need the money to operate. Cohen also said the state is spending more money than expected because courts have blocked some cuts, while some savings may come later in the fiscal year than forecasters predicted.
If the legislature wants to cut spending they can cut spending. Courts can't stop that. If they try, cut spending on the courts.
Posted by: Steve White ||
01/31/2012 16:57 ||
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#1
Gee... why is revenue less than what their optimistic budget was? Business flight? Investors not investing? Unicorns failed to fart enough diamonds?
And who the fuck will still be willing to invest in California at this stage?
#2
"I think they've made the biggest financial mess that any government's ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people's money. It's quite a characteristic of them." Mrs Thatcher (PBUH)
#4
No problemo, dudes. We'll just borrow some money (we'll call it issuing bonds!) and raise taxes on those stinkin' rich people. Voila! One more can kicked down the road.
#8
That's what's been happening so far, Chili -- that's how a number of states have managed to avoid bankruptcy these last few years. The Feds have been giving them money in various ways. Where do you think that trillion and a half deficit is going?
Posted by: Steve White ||
01/31/2012 19:50 Comments ||
Top||
What do the NAR, Consumer Confidence and CBO forecasts have in common? If you said, "they are all completely worthless" you are absolutely correct.
Alas, the market needs to "trade" off numbers, which is why the just released CBO numbers apparently are important.
And the fact that the CBO predicted negative $2.5 trillion in net debt by 2011 back in 2011 is largely ignored. Anyway, here are some of the highlights.
2012 Deficit: $1.1 trillion; 2013 Deficit: $0.6 - yes, we are cackling like mad too.
Unemployment to remain above 8% in 2012 and 2013; will be around 7% by end of 2015; to drop to 5.25% by end of 2022.
This forecast is utterly idiotic and is completely unattainable unless the US workforce drops to all time lows and the US economy generates 300,000 jobs a month for 10 years
Needless to say, CBO assumes the best of all worlds in this meaningless forecast. But here is the kicker: "Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle (on the basis of the experience in previous downturns) not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 1¼ percentage points higher than the actual rate of 8.7 percent" translation: CBO just admitted that the BLS numbers are bogus and real unemployment is 10%. Thank you Still is really bad out there, despite what the MSM and Bambi says. If we leave the pessimists in the CBO, the Bambi administration and the MSM in charge, we will certainly be able to count on 10% unemployment over the next decade.
#2
Meanwhile, back in Kansas: A coalition of business groups will propose Kansas start a new program to help some illegal immigrants remain in the state so they can hold down jobs in agriculture and other industries with labor shortages, coalition representatives disclosed Tuesday.
U.S. employers may petition for skilled or unskilled alien workers to meet temporary or seasonal needs in positions for which qualified U.S. workers are not available. It is important to note that the employers need for such services must be temporary. There is currently an annual cap of 66,000 visas for H-2B workers. There is currently no annual cap on visas for H-2A workers.
Conservative bloggers are lashing out against the Republican establishment for a redistricting map that could harm tea party favorite Rep. Allen Wests (R-Fla.) reelection chances, even sparking a conspiracy that pins the alleged campaign against West on Mitt Romney.
The rights blogosphere has been buzzing over the last few days about a redistricting plan passed by the Republican-controlled Florida legislature that would put West in a district that is even more Democratic than the one he currently occupies.
#4
During his draft deferment years, Mitts suffered his missionary service at the Rue De Lota home base, which had been owned by an affluent Jewish family before the Nazis seized it during the War. The LDS purchased the it in 1952.
#5
Word is, a lot of Democrats are voting in the Republican primary for Romney, denying the republican party of the ability to choose a true conservative. Indeed Obama-lite vs Obama is thier goal.
Mod Note: Florida is a Closed Primary State
Note from another moderator: It's best to check on the basic facts in such matters. Just to be very clear, a closed primary = Dems can't vote in the primary. And if they managed to change their party registration last year, they can't switch to vote Dem in the national election.
#6
Conservatives pointed out that a major player in the process, Florida Speaker Designate Will Weatherford, has been a surrogate for Mitt Romney in the past. Some used this fact to suggest that Romney was involved in a campaign against Allen West.
The Michael Bloomberg of Massachusetts. This is two presidential elections in a row where Democrats pick the Republican nominee.
#10
See the above mod note. FL has a closed primary, which means the only way registered Dems can vote in the primary is if they changed their registration last year, well before the field had slimmed down at all.
#17
Mr. West, smart as he is, will hopefully now buckle down to the task of learning the strategy, tactics, battlefields, and allies/enemies of Republican/conservative politiicians. Getting elected and representing your constituents is only part of the job.
In other words, more or less what rammer said. ;-)
WASHINGTON -- House Republicans are expanding their probe into the Obama administration's energy programs, investigating $500 million in green job training grants that placed just 10% of trainees in jobs, according to a government report.
The program's goal was to train 124,893 people and put 79,854 in jobs. But 17 months later, 52,762 were trained and 8,035, or roughly 1 in 10, had jobs. Those numbers come from an audit by the Department of Labor's inspector general, which recommended that the administration end the program and return unspent money.
President Obama has made green jobs a cornerstone of his economic agenda. In his first 2012 campaign ad this month, he said clean energy industries created 2.7 million jobs and were "expanding rapidly." But Republicans have pounced on failures, such as the bankruptcy of Solyndra, a solar panel maker backed with a Department of Energy loan guarantee.
Citing what he calls "abysmal results" in the job training program, House Oversight Committee Chairman Darrell Issa, R-Calif., is demanding answers about how the Department of Labor awarded the grants, which were funded out of the 2009 stimulus bill. I think the public is getting this. Green=stupid
#6
As per #2's list of Greenie Companies, IMO despite any good intentions the Fed + latter have not shown or proven that so-called "GREEN TECHS" is par or better than current, NON-GREEN TECHS IN USE, either in costs, power, or related efficiencies. ALSO, FEW IFF ANY NON-GOVT. INDUSTRIO-CONSUMER FREE MARKETS = MARKETS' NEEDS OTHER THAN FED VENTURES/ENDEAVORS TO DEV THE NEW TECHS.
This is why I support Newt Gingrich's scheme for the US to return + set up a MOON BASE by the end of his second term as POTUS [Year 2020] - Newt's offer of formal US Statehood for the MOON/LUNA is also nice, but optional.
IMO the Bammer + DemoLeft should support the US going back to the Moon, IFF ONLY TO SAVE OR SALVAGE THE US, GLOBALIST "GREEN REVOLUTION" WHOSE WEAK + SINKING MAIN DECK IS FAST APPROACHING THE WATERLINE.
[POST-SUNK FRED FLINTSTONE + PAL BARNEY RUBBLE ARGUING UNDER THE WATER here].
It (white blood cells/government) should be there just to stop nasties, but it spreads and metastasises, and over time kills what's it's there to protect.
#3
A .5% raise in a 3 year stretch is not what I would call out of control.
The federal government workforce is mostly professionals and technical people (DOD excluded). As a federal engineer, I am somewhat underpaid in wages, but have a better defined benefit pension than many private sector people. Or so they say in the article.
What they don't mention is that CSRS pension hasn't accepted any new enrollees since 1984 and that since then FERS is the only federal worker pension that non postal service employees can get into.
FERS pays 1% per year of service on you high 3 year average salary. So after 30 years if you made $75,000 a year for your last 3 years, your yearly benefit would be $22,500 or $1,875 a month. So we have to pay into Social Security and have our own 401K fund that we pay into called the TSP. We have to put the 3 together to make enough to retire and not eat dog food.
CSRS employees work 30 years and retire at 80% of high 3 salary and don't have to pay SS out of their check.
You can be pissed off at the lazy, arrogant, stupid, icky federal employees all you want, but let's please get the facts straight. I've worked private sector and am currently in the public sector. I can easily move again if the need arises. A pay freeze until 2015 will have a lot of very hard to replace people heading for the door such as scientists and engineers. The truly overpaid derelicts will just dig in and survive, they have nowhere to go anyway. So I think the discussion needs to be tailored a little bit to address problem employees and waste, not everyone that happens to work for the government.
Just my two cents worth, but I work with a lot of capable, dedicated people.....and a few douche bags.
"...not everyone that happens to work for the government."
But oftentimes people in the government think all of us do. That's an issue.
Bureaucrats, paperwork, treading to float or floating to tread.
When I see things like federal employee unions, it gets me riled up.
I understand the tortoise and hare game, but I cannot appreciate the tortoise out-competing the market that is it's sole support.
Federal Employees, like all are of many different calibers and qualities. But lower pay and pensions must be accepted in exchange for job stability.
The bigger it gets, the smaller it's support base gets.
On a personal note, I have met few Federal Employees I have dis-liked. Very few.
#5
have a better defined benefit pension than many private sector people
If you have any defined benefit pension to look forward to, you are way ahead of the vast majority of private sector workers, whose only defined benefit is Social Security. Defined benefit pensions in the private sector are going the way of the dodo, except for a few of the elite private employees, like CEO's.
#6
Few gov't workers paint the rest as lazy.
yes there are a buhch that aren't worth the sweat off your ballz, but most put in an honest ( and then some) day's work.
Spousal Unit is one of those; and while i do have a bias, she routinely travels on the weekends when she gets sent on out of town details (many not of her choosing)
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.
California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.
What do the NAR, Consumer Confidence and CBO forecasts have in common? If you said, "they are all completely worthless" you are absolutely correct. 
WASHINGTON -- House Republicans are expanding their probe into the Obama administration's energy programs, investigating $500 million in green job training grants that placed just 10% of trainees in jobs, according to a government report.
