NewsMine — economy — united-states — 2003 — 2003-post-war — Viewing Item

California state budget crisis { April 23 2003 } Original Source Link: (May no longer be active)    http://www.kfwb.com/news_local.asp?displayOption=&contentGUID={8DCDFABA-C25A-42B9-B367-752F5C1F8FFD}&groupName=KFWB%20Main%20Headline&siteGUID={3B62BF55-4A93-48E6-A45D-6A495DC423AD} http://www.kfwb.com/news_local.asp?displayOption=&contentGUID={8DCDFABA-C25A-42B9-B367-752F5C1F8FFD}&groupName=KFWB%20Main%20Headline&siteGUID={3B62BF55-4A93-48E6-A45D-6A495DC423AD} Wednesday, April 23, 2003 State Budget: Controller Could Issue 'IOU's' to Vendors Amid Budget Crisis It would be a worse case scenario, but the state could begin writing IOU's to pay the bills if lawmakers don't nail down a fiscal budget and the state technically runs out of money in a few weeks. A field poll found that the majority of Californians are skeptical about whether Gov. Gray Davis or the Legislature will do what's needed to fix the problem. (KFWB) 4.22.03, 2:55a -- California could completely run out of money soon. Back from the holiday break, state lawmakers have a tall order as they are charged with coming up with a fiscal budget or the state could technically go completely broke. In fact, financial conditions are such that the state controller could begin the budget process by issuing 'IOU's' to vendors doing business with the state.That notion of IOU's is not sitting too well with LA County Supervisor Zev Yaroslavsky who told KFWB that there is no existing budget and that issuing deferred payment notices to vendors is equivalent to a "handshake with a pauper." "Where's the light at the end of the tunnel and how will we redeem these IOU's?" Yaroslavsky said, adding that the controller's possible contingency plan is irresponsible. Other critics call the idea a "job killer" and say it's ridiculous to essentially tell vendors 'We'll pay you later.' Vital services in the state that could be affected by the crisis include hospitals and jails as well as state food Inspection and prosecutorial offices. Four months of wrangling have produced an impasse between Democrats and Republicans in the State Assembly. Meanwhile, as the state's fiscal crisis grows worse, Californians' confidence in state leaders wanes, a new Field Poll shows. The Field Poll released Tuesday found the majority of Californians are skeptical about whether Gov. Gray Davis or the Legislature will do what's needed to fix the problem. By a ratio of nearly 2-to-1, poll participants also said higher taxes will be part of a solution to fill a budget gap that could hit $34.6 billion. Sixty-one percent of Californians -- including 54 percent of Republicans -- believe taxes will have to be raised. Republic lawmakers, however, have said they will not vote for a budget plan that includes tax hikes. "I think the public has already absorbed the bad news," said Mark DiCamillo, director of the Field Poll. "They are expecting tax increases and large budget cuts from what they are hearing coming out of Sacramento." Californians, however, largely reject plans to borrow money to be paid back during the next fiscal year. Sixty percent don't like the idea of putting off part of the problem until next year and only 26 percent said it is a good idea. Meanwhile, confidence in California lawmakers has waned. Only 9 percent of Californians say they have a great deal of confidence that Davis will do what's right to resolve this year's state budget deficit. Thirty percent say they have some confidence, while the majority -- 58 percent -- doesn't have much confidence in him at all. Confidence in Davis mimics that of 10 years ago, during the last budget crisis when Republican Pete Wilson was governor. The news comes just a week after the San Francisco-based pollsters found that Davis' approval rating had reached the lowest point of any California governor in 55 years. Nearly half of the voters said they would toss him from office if a recall bid makes it to the ballot later this year. The state's opinion of its Legislature is also bad. Only 7 percent of the poll respondents say they have confidence that the Legislature will do what's right, while 42 percent have very little confidence. The results of the latest poll are based on a statewide survey of 502 California adults conducted April 1-6. There's a sampling error of plus or minus 4.2 percentage points. The Associated Press Contributed to this report

Budget cutback healthcare poor { April 28 2003 } Buffett forecasts doom California state budget crisis { April 23 2003 } Dollar edges lower { April 9 2003 } Economy feeling sars effect Fed finds lackluster economy Fed rescue plan print money Fleming bankruptcy pain spreads { April 17 2003 } Gold up after war { April 9 2003 } Greenspan for 5th term { April 23 2003 } Jetblue orders 65 airbus { April 24 2003 } Markets red after war Nation jobless climbs { April 17 2003 } Ny mayor ten thousand more layoffs { April 15 2003 } Oil tops 30 barrel { April 17 2003 } Profit warnings hit war enthusiasm States budget shortfall { April 21 2003 } Treasure could face default { April 29 2003 } Files Listed: 18

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