White House says no to California budget help

[garbon]

Such a wealthy state, huge economy, and still it found ways to go seriously into financial problems,

Oh are you describing the US as a whole?

[alfred russel]

Would bankruptcy cancel those ruinous propositions, sort of like bankrupt companies can cancel union contracts?  I would guess not, but maybe I'm wrong.

Imagine if bankruptcy nullified laws. The day of bankruptcy would be California: Total Anarchy.

[KRonn]

Such a wealthy state, huge economy, and still it found ways to go seriously into financial problems,

Oh are you describing the US as a whole?

Hehe... the USA also does seem to be trying to get to the same point as fast as possible! But isn't there yet.

[Monoriu]

Such a wealthy state, huge economy, and still it found ways to go seriously into financial problems, possibly leading to default or bankruptcy. What a sad mess....

If it isn't so wealthy it may not get into such a big hole.  The more you earn, the more you spend.  When you earn less, you still spend as much. 

[Vince]

California is way past too big to fail.  It is too big to rescue.

NY will be joining them soon enough.   

[KRonn]

Move over California, make some room for others... lots of other states are going through huge budget problems.

http://www.msnbc.msn.com/id/31680340/ns/business-stocks_and_economy/

Calif., other states face tough budget choices
State lawmakers feel heat as begin new fiscal year without a budget

SACRAMENTO, Calif. - Legislators in more than a half-dozen states, their revenues evaporating in the recession, are frantically working to stave off government shutdowns and devastating service cuts. California failed to meet a midnight deadline and now may need to issue IOUs instead of paying bills.

Across the country, lawmakers are feeling the heat as their legislatures began the new fiscal year without a budget in place.

In Illinois, the sputtering drive to come up with a state budget broke down completely Tuesday, leaving the state without any plan for paying its employees or delivering government services. The session ended without any firm plans to return or even for Gov. Pat Quinn and legislative leaders to resume negotiations.

In Pennsylvania, talks between Gov. Ed Rendell and top legislators ended Tuesday night with no substantial progress, aides said. Rendell said he didn't think an agreement would come soon. The state faces the prospect of not being able to pay state employees if they cannot resolve an impasse.

The end of June marked the end of the fiscal year in many states, meaning lawmakers worked late Tuesday to pass budgets in a year that has seen the recession take a devastating toll on government finances.

Fallout from California's budget mess threatened to spread nationwide because of the sheer size of the state's economy. The Senate rejected three bills designed to save $5 billion, including $3.3 billion in education funding cuts that had to be enacted before Wednesday.

Senate President Pro Tem Darrell Steinberg, a Democrat, called Republicans' refusal to vote for the measures "an irresponsible position to take." At least two Republican votes were needed to put together the two-thirds majorities required to approve the legislation, which passed the Assembly last week with bipartisan support.

Arizona, Indiana, Ohio, Connecticut and Mississippi also were among the other states that raced against the clock to pass budgets — and avoid crippling consequences.

Faced with a budget stalemate, the Ohio House voted in favor of a seven-day spending plan that will allow the state to keep operating while budget talks continue, the first temporary budget Ohio has been forced to approve in 18 years.

Indiana narrowly averted a large-scale government shutdown after coming to terms on a budget.

Mississippi lawmakers approved most of the $6 billion budget, but left one agency — the state's utility regulatory agency — unfunded. The Public Service Commission said it didn't know how the agency would continue to function, but Gov. Haley Barbour has said he can run the agency by executive order.

In Connecticut, Gov. M. Jodi Rell signed an executive order to keep the government running without a two-year budget in place. While she contends the average taxpayer won't notice any change, municipal officials fear delays in state grants that fund everything from road repairs to education.

In the wee hours Wednesday, the Arizona Legislature completed action on budget bills to implement most of a compromise $8.4 billion budget negotiated with Gov. Jan Brewer. Lawmakers omitted a sales tax increase that Brewer wanted, and her spokesman declined to say if she would sign the bills.

In Pennsylvania, state workers will receive only partial pay on July 17 and July 24, after which paychecks will be withheld entirely until the impasse is solved. They will then be paid retroactively.

Rendell said 10 banks and credit unions have agreed to help 69,000 state employees by offering them low- or no-interest loans and lines of credit.

In most states, the debate centers around whether states should be raising taxes to bridge the budget gaps. California Gov. Arnold Schwarzenegger said he wouldn't sign anything that raised taxes or fees beyond what he has already proposed.

Click for related content
Crisis looms as Calif. misses budget deadline
Census: Large cities are now growing quicker
Pending home sales rise for 4th straight month

"They should forget about that," the Republican governor said, accusing Democrats of going through a "song and dance. Let's get to work, fix it."

State Controller John Chiang has said he would have to start issuing the IOUs on Thursday unless lawmakers took steps to stem the state's red ink by then.

Roughly $3 billion worth of IOUs will be issued in July unless a compromise on closing the deficit is reached quickly. They will be sent to state contractors, college students, welfare recipients, low-income seniors, the disabled and others who depend on or deliver state services. Counties will not get paid for social programs they administer. 

[garbon]

Move over California, make some room for others... lots of other states are going through huge budget problems.

Is there somewhere we can see how much each state is short?

[Darth Wagtaros]

Anybody else think the Depression will end within 15 years?

[MadImmortalMan]

Move over California, make some room for others... lots of other states are going through huge budget problems.

Is there somewhere we can see how much each state is short?

http://money.cnn.com/news/storysupplement/economy/gapmap/index.htm

[Neil]

Anybody else think the Depression will end within 15 years?

It's not so much a Depression thing as it is a legislative incompetance thing.

[PDH]

Wyoming seems to suck at recessions.  Too small to fail, to inconsequential for anyone to care.

[jimmy olsen]

Move over California, make some room for others... lots of other states are going through huge budget problems.

Is there somewhere we can see how much each state is short?

http://money.cnn.com/news/storysupplement/economy/gapmap/index.htm

$590 million, for our size is pretty bad, but it doesn't cross the line into catastrophic like some of the other states.

[citizen k]

from http://www.pbs.org/newshour/bb/north_america/july-dec09/budget_07-01.html

more from unions gone wild:

JEFFREY BROWN: In Illinois, there was also legislative stalemate today. Last night, union workers protesting cuts to programs blockaded the doors to the statehouse chamber. They demanded an increase in state income taxes, which help pay their salaries.

[Monoriu]

In Pennsylvania, state workers will receive only partial pay on July 17 and July 24, after which paychecks will be withheld entirely until the impasse is solved. They will then be paid retroactively.

I'm surprised.  It would be illegal for employers not to pay salary owed within 7 days of pay day in Hong Kong.  I know I will raise hell if I'm not paid fully.

[citizen k]

  I know I will raise hell if I'm not paid fully.

And risk being sent to Outer Mongolia?