by Nick S.
Member since:
October 3, 2006

CA reaches deal on budget, deficit

July 21, 2009 10:14 AM UTC (Updated: July 21, 2009 11:09 AM UTC)
views: 0 | comments: 5

I have to admit that I'm proud of CA for acting like adults and finally "solving" their budget gap without a single tax increase and at least $11.5 billion USD in spending cuts.  They also got more drilling off the coast and more welfare reform.

Schwarzenegger said no new state taxes are involved in the plan but includes accelerating collection of some taxes and taking $4 billion from local government.

Among the cuts in the new budget are:


  • $6 billion from K-12 schools and community colleges.
  • $3 billion from the California State University and University of California systems.
  • $1.2 billion from the state prison system.
  • $1.3 billion from Medi-Cal, the state's health program for the poor.


A number of social programs have been cut rather than following the governor's proposal to eliminate them.


They did kick it down the road by borrowing a large chunk of the money.  But that they did it without any tax increases was surprising to me as I thought it'd be a mixture of cuts, tax increases and borrowing.  Further, the Federal Government had earlier denied helping out the state, which likely put pressure on the State to make drastic cuts.  Maybe Obama and the Congress could learn something.


Comments: 5

David Salyer Jul 21, 2009, 2:15pm UTC
The fact that they did kick it down the road will only cause problems later on. This budget is pretty much the same as every other budget that they have ever passed. Watch, in two to three months I would not be at all surprised the California is once again facing a deficit of 10 to 20 billion that the legislature will have to try and close once again!
Nick S. Jul 21, 2009, 3:37pm UTC
How is it the same? They cut billions of dollars in spending. And they didn't raise taxes. They increased oil production capabilities and reduced the length of time that people can be on welfare.
David Salyer Jul 21, 2009, 4:22pm UTC
They are still borrowing money to close the gap. The governer issued IOUs which will have to be paid back with interest. I feel they are still creating debt that the State cannot pay. Every year we go though the same thing where they fight over a budget and when they finally do pass one they all pose for a photo and say they passed the best budget they could only to run into yet another cash crisis later down the road. I think this budget will cost us more than it will save. I guess I will just have to wait and see how it plays out.
David Salyer Nov 19, 2009, 10:16am UTC
I guess we all now know how it played out. Nothing was solved....
Loquacious Linda Jul 21, 2009, 6:01pm UTC
Remember, with EVERY state MANDATED to take stimulus money, along with it came additional obligations/expense to EVERY STATE. They gave the states pennies and then demanded they continue or do the program, then keep it going.
EVERY state is feeling the pinch. So, we will be hit with a double whammy ... soon!

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