California, Short of Cash, May Ask U.S. for Loan

[Jahajee]

NY State budget billion hole

October 3, 2008, 10:20 am
Crisis Puts $1.2 Billion Hole in Albany Budget

By Danny Hakim
paterson

Gov. David A. Paterson’s administration said this morning that the financial crisis had opened a $1.2 billion hole in this year’s state budget and predicted the numbers would continue to worsen.

Mr. Paterson also said he would submit an executive budget for next year a months ahead of time — by mid-December instead of mid-January, and try to pull forward the state’s fiscal year. He said he was taking the steps to try to forestall a downgrade in the state’s credit rating.

“There’s no way to sugarcoat it,” the governor said during a public meeting with legislative leaders on Friday morning. “It has become clear over the last 24 hours, according to Warren Buffett, that the United States economy can be compared to a great athlete who suffered a stroke.”

The governor said he will recall lawmakers to Albany for another special session on Nov. 18 — well after the election. Mr. Paterson said he will seek $2 billion worth of cuts for the current fiscal year, which ends on March 31, 2009, because of his fears that the state’s taxpayers will continue to decline. Lawmakers already came back to Albany over the summer and cut roughly $400 million from the current year’s budget already.

Mr. Paterson did not release new numbers for next year’s budget gap, but most expect the falloff next year will be even more severe. New York’s exposure to the financial crisis is considerable because Wall Street accounts for a fifth of the state’s tax revenue.

Mr. Paterson also lamented the news that Wachovia may be acquired by Wells Fargo, a West Coast bank, instead of the New York based Citigroup.

“That’s a significant hit to the New York economy,” Mr. Paterson said.

 

[GermanTrader]

Quote from Jahajee:

Gov. Arnold Schwarzenegger in a letter Thursday night to Treasury Secretary Henry M. Paulson Jr. said that with credit markets essentially frozen, the state, like a slew of others and local governments nationwide, had no access to short-term financing that normally support day-to-day operations.

Why is government using credit other than for purchase orders? Why is government getting loans for day-to-day operations? Goddamn it people, declare war on credit or shut up about this bailout.

 

[TraderZones]

When these states with deficits finally decide that they need to slash spending, not prune it. Every time things get better, they open up for new expenditures, new large loan programs for "capital" projects., etc.

Its easy. Cut everything 30%. Tell the whiners, "shut up! We are going to live within our means" You don't like it, move to another state or we will cut you 40%!!! No more entitlements or mandates.

For heaven sakes - many states sold off their bounty from the tobacco settlement instead of enjoying a revenue stream for years to come.

Tell the courts and the legislatures to shut their traps when they demand new spending for downtrodden group XYZ.

 

[freewilly]

"Why is government using credit other than for purchase orders? Why is government getting loans for day-to-day operations? Goddamn it people, declare war on credit or shut up about this bailout."

Agree, this is just beyond me. Why don't spend what they have other than what they can borrow? Whichever bank loaned money to CaL state deserves a bankruptcy.

 

[Cesko]

Social democracy system has no effective mechanism for spending control. No Ron Paul, no third party is gonna solve the problem. Problem will be solved when s. democracies spend themselves out of existence. (entitlements, demographic problems etc.)