California Budget Crisis, and why it is significant to proposition 6

California is in a budget crisis. A couple years ago California faced a rough economic patch with the fail of the dot.com. The economic hardships were “fixed” by borrowing and cutting social programs, which have only extended with the rise of foreclosed homes.

California deficit is somewhere between $16 billion and $18 billion. Money that California does not have. In fact, California Governor Schwarzenegger wrote to the Treasurer Secretary, Henry Paulsen, asks for $7 billion to meet the state needs for this month.

In the October 2nd letter, the Governor stated that
“The credit crisis has frozen investment and commerce, forcing businesses and families to stop purchasing goods and services. This has resulted in tens of thousands of lost jobs and billions of dollars in lost tax revenue to the state.”

California is already struggling to meet the responsibilities it already has, and proposition 6 (and 9) would further drown California its state debt. The issue is not solely that California has a debt, but also that on October 2, 2008 (the date of the letter), California did not have enough money to fund the services it already has in place.

Proposition 6 does not raise taxes, instead, money needed will be taken from the state’s general fund. This money would otherwise fun schools and social services that are financially struggling as of right now.

This election will decide on some very important propositions that may further drive California into a greater financial crisis. If voters choose to believe that the Safe Neighborhood Act will truly reduce gang related crimes, then voters must also analyze the significance of this proposition (as well as others, of course) to California’s financial crisis.

This may seem as a crude alternative, but it is also a very practical one. The question becomes, is this what California needs right now? Is this the best way to handle the current crisis? Now, this proposition becomes an issue of crime as well as an issue of fiscal responsibility.


CBS Evening News: On California Financial Crisis


Watch CBS Videos Online

"With California expecting to run out of cash by Oct. 28th, Gov. Schwarzenegger has sent a letter to Treasury Secretary Paulson explaining that the state may need $7 billion bailout. Ben Tracy reports."



Indy Bay January 5, 2008
California prepares massive cuts in response to budget crisis and economic woes
http://www.indybay.org/newsitems/2008/01/05/18470174.php

Tracy Unified School District
http://www.tracy.k12.ca.us/cabudgetcrisis.htm

Office of the Governor
Press Release
Governor Schwarzenegger Sends Letter to U.S. Department of Treasury Regarding the National Financial Crisis’ Effect on California and Other States
http://gov.ca.gov/press-release/10734/