Who's responsible for California now?
California is broke, and the federal government has rejected the Golden State's bid for a bailout. So, what happens next? Bob Moon reports.
California Gov. Arnold Schwarzenegger speaks on the status of the state budget at the California Center for the Arts on June 12, 2009 in Escondido, Calif. (David McNew/Getty Images)
More on Domestic, America's Financial Crisis
TEXT OF STORY
Kai Ryssdal: There was some news out of Washington today that brought to mind one of the more famous newspaper headlines from the 1970s. Talking about the Ford administration's response to New York City's budget problems back then, the Daily News went with "Ford to City: Drop Dead." Now it's California on the fiscal ropes. And the Obama administration is telling the state not to count on a federal bailout. Here's our senior business correspondent Bob Moon.
BOB MOON: California officials had hoped the Feds would make up for some of the state's expected $24 billion deficit. But former Governor Gray Davis, who faced his own budget woes a decade ago, agrees lawmakers here can solve their own problems.
GRAY DAVIS: I think the federal government is saying, "You show us you have the mettle to do something in Sacramento. Don't just come whining to us. We're not going to abandon you, but you have to go first." That's how I read their message.
Davis points out his successor, Arnold Schwarzenegger, has predicted revenue near where it was when Davis was governor.
DAVIS: We can afford the level of government we had in 1999, which as I recall was pretty good. Now, is it painful? Absolutely. But life is all about choices.
The question is whether lawmakers will have the political will to make those choices. Governor Schwarzenegger was sounding doubtful but hopeful earlier this month.
GOVERNOR ARNOLD SCHWARZENEGGER: People are writing California off. They're talking about the end of the California dream. They don't believe we in this room have the courage and the determination to do what needs to be done or that the state is even manageable. Let's prove all the pundits wrong.
At San Francisco State University, political science professor Graeme Boushey fears it's coming down to brinkmanship.
GRAEME BOUSHEY: You know, I've heard from the right, Republicans who really think this is the step towards, you know, drowning government in the bathtub. Right? Forcing government to become smaller. On the other hand, there are Democrats I've heard talk who actually welcome the budget crisis, because they think the state will be forced to revise how we go about budgeting, to enable California's Democratic majority to raise taxes and to expand government more easily.
So could the state end up running out of money to pay its bills? Boushey hopes not, but says he can't rule it out.
In Los Angeles, I'm Bob Moon for Marketplace.
Comments
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From Tampa, FL, 06/17/2009
The voters of California have done this to themselves. The sooner they realize that no one is going to ride in and save them, the better.
From Los Angeles, CA, 06/17/2009
Susan, California does not have free college admission. The latest figures I found, for the 2008-09 year, set tuition for the UC system at $8,062. With other fees and room and board, you're looking at more than $25,000 a year. The Cal-State system is cheaper, with tuition at $3,314 and total expenses estimated at more than $18,000 a year. Again, these are figures for the current year. They'll be higher for 2009-10.
From Pottstown, PA, 06/17/2009
Does California still have free state college admission for state residents? If they do, maybe they should start there to help their budget. PA residents get a reduced rate to state colleges/universities, but not a wholesale free ride.
From San Diego, CA, 06/17/2009
The inherent problem is that tax income changes with the economy. When trading is high, tax income increases and things are good. However, in times like these we realize that we can only pay for the things we NEED. Has anyone looked into prioritizing (and publishing) tax income-based budget items so that we don't come to this problem in the future? This way, we actually pay for the things we want after the needs are purchased. In essence, we'll have pre-balanced the budget.
06/16/2009
This is just a question of will.
Raise taxes, lower services, or both.
Except we have citizens that voted in how the budget should look. And if you ask any of them, the answer is usually "Lower Taxes" and "More Services".
The Problem: People don't see the Government as themselves. They see the Government as some other entity that takes their money.
I'm glad to see Gray Davis telling them all "I told you so"
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