Re: Volltext (E)

verfasst von dottore, 30.06.2003, 12:31

-->Calif. Near Financial Disaster
Hours Remain to Solve $38 Billion Shortfall

By Rene Sanchez
Washington Post Staff Writer
Monday, June 30, 2003; Page A01

LOS ANGELES -- Any day now,
community colleges here may begin
telling faculty members that they
cannot be paid and students that
summer classes are canceled.

Nursing homes are losing so much
state aid that many soon may have
to shut down or limit their services,
a prospect that has elderly residents
confused and frightened.

As many as 30,000 government
workers who had been expecting
pay raises in the fall are instead
receiving formal notices warning
that they could lose their jobs by
then, because the state is broke.

This is life in California, on the brink of a fiscal disaster.

The nation's most populous state, home to one of the world's largest
economies, has been staring in disbelief at the same dire predicament for
months: a $38 billion deficit, the largest shortfall in its history and an extreme
example of the budget woes afflicting many states. But now it has only hours
left to solve the problem.

State lawmakers have until midnight to reach a compromise with Gov. Gray
Davis (D) on a budget that would wipe out the enormous deficit, but the odds
of that happening appear slim. And without a deal, the state will be bound by
law to begin cutting off billions of dollars in payments to its agencies and its
contractors in July -- and could run out of money by August.

"It looks bleak," said Perry Kenny, president of the California State
Employees Association, which represents more than 100,000 government
workers."This is the biggest hole we've ever been in, and no one can seem to
find a way out. We're all sweating bullets here."

For weeks, the state's budget has been hostage to an intensely partisan
political war over taxes and spending that is now getting even more bitter and
complicated because of a Republican-led campaign to recall Davis from
office. Organizers of that movement have collected nearly 400,000 voter
petitions in favor of ousting the governor, and political strategists in both
parties say a recall election, which would be unprecedented, is looking ever
more likely.

Davis and the Democrats who control both houses of California's legislature
cannot get their way on the budget because state law requires a two-thirds
majority vote for it to be approved. They need a few Republican lawmakers
to support their plan, which they say must include new taxes in order to save
public schools and other vital programs from ruin.

But Republicans are refusing to consider any tax increase, which they say
would harm California's already weak economy, and are demanding deeper
cuts in government spending.

There is no end in sight to the impasse, which California voters are watching
with increasing exasperation. Polls show that public support for Davis has
plummeted below 25 percent, and that two-thirds of voters are dismayed with
the legislature.

Republican lawmakers say they will not budge from their stand on the budget
because they are fed up with Davis's governing style.

"He and his allies have gotten the last three budgets they wanted and we're
nearly bankrupt," said James L. Brulte, the Republican leader in the state
Senate, who has threatened to work against the reelection of any GOP
colleague who sides with Davis in the budget battle."Somebody has to stand
up and say enough is enough. That's what Republicans in California are
doing."

But Democrats see other motives. Some are accusing GOP lawmakers of
deliberately dragging their feet on the budget in the hope that will hurt Davis
politically and strengthen the recall campaign.

"It's hard to take Republicans seriously when they say they want a real
solution to this budget crisis at the same time some of them are openly
backing the recall," said Roger Salazar, a political adviser to Davis."They are
putting important state programs at risk just out of pure political spite."

Democrats have retreated recently from some tax proposals but are insisting
on a half-cent sales tax increase. Several dozen Democratic legislators even
barnstormed Republican districts around the state last week to plead for
support but got mostly hostile receptions.

Davis, who left the state this weekend to attend his mother's 80th birthday
celebration in New York, is still expressing optimism that a budget deal can
be reached soon, if not by tonight's constitutional deadline.

"I am doing everything I can to encourage, cajole, persuade, guilt-trip and all
the things you do to try to make this happen," he told reporters last week.

California's $38 billion deficit is larger than the entire annual budget of any
other state except New York. It represents about one-third of the state's
annual spending.

As in many other states, the shortfall is largely the result of the national
economic downturn -- which has been especially severe in Silicon Valley, an
engine of California's $1.3 trillion economy. Soaring health care costs for the
poor and new expenses for homeland security are other contributing factors.
Republicans here also contend that Davis, who was narrowly elected to a
second term in November, has spent recklessly while in office and relied on
accounting gimmicks to balance the budget last year.

California, which had a $9 billion budget surplus three years ago, is constantly
caught in boom-or-bust economic cycles. In the early 1990s, Republican
Gov. Pete Wilson had to raise taxes and cut spending to erase a $14 billion
deficit. Escaping this crisis will be far more difficult and painful.

To close the $38 billion deficit, state leaders have approved $7 billion in cuts
affecting virtually every government program. They have borrowed $11 billion
to keep California solvent through the summer. Earlier this month, risking the
wrath of voters, they tripled the annual state tax on vehicles, a $136 increase
for most motorists. But that still is not enough to balance the budget.

Now, with time to find a solution running out, state Controller Steve Westly is
warning that as early as Tuesday more than a billion dollars in payments due
to state agencies, medical providers and private companies that contract with
California must be stopped.

"This is going to be real hurt for the state of California," he told reporters a
few days ago,"and the problem gets worse every day we go without a
budget."

Some public institutions already are reeling. The Los Angeles Community
College District, which enrolls 130,000 students, has been forced to eliminate
classes and lay off some of its faculty, and is on the verge of raising tuition by
more than 50 percent because of the budget crisis. Thousands of students
have dropped out because of cutbacks this year, college officials say, and
more are likely to leave if additional classes are canceled.

Mark Drummond, the chancellor of the district, said that its network of
colleges has enough money to operate until August, but would not be able to
pay its vendors or its faculty if the state is still engulfed in deficits by then.

"We could have to turn off the lights and tell everybody to go home,"
Drummond said.

Nursing homes are suffering the same plight. Some already have stopped
receiving all the payments they had been expecting from the state and are
cutting back services to their residents and turning away new patients. If more
cuts are approved, or if the budget gridlock doesn't end soon, dozens of
homes could go bankrupt and close.

Betsy Hite, spokeswoman for the California Association of Health Facilities,
said many elderly residents are baffled and despondent over the looming
hardships.

"They see what's going on in the newspapers and on TV," she said."Their
perspective is, why are they doing this to us? What did we do?

"If I were a betting person, I wouldn't bet we're going to be fine," Hite added.
"The gap is just too huge."

Special correspondent Kimberly Edds contributed to this report.

© 2003 The Washington Post Company

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gesamter Thread:

• California hours from desaster away (mL) - dottore, 30.06.2003, 12:17
  • Link funktioniert leider nicht - silvereagle, 30.06.2003, 12:28
    • Re: Link funktioniert leider nicht / bei mir auch nicht oT - - Elli -, 30.06.2003, 12:30
      • Re: Das ist der Link und noch eine BITTE! Kopiert den kompletten Text in dieses - Luigi, 30.06.2003, 12:33
        • Re: Äh Danke dottore ;-) Muss wohl öfters Aktualisieren drücken hier ;-) (owT) - Luigi, 30.06.2003, 12:34
    • Re: Volltext (E) - dottore, 30.06.2003, 12:31
  • Schwarzenegger for Gouvernor! - Emerald, 30.06.2003, 14:17
    • Ist er wieder salonfähig nach der Affaire mit irgend einer Schickse? - Trixx, 30.06.2003, 22:03
  • Re: California - die Lage drüben spitzt sich zu- DAS HOFFE ICH und meine Unzen - CRASH_GURU, 30.06.2003, 14:36
  • Re: Finanzamt Würzburg - 2good4you, 30.06.2003, 17:26
    • Re: Aah, die Illiquidität hebt auch das Haupt?! Gleich RA einschalten + Presse (owT) - dottore, 30.06.2003, 18:06
      • Re: Gleich RA einschalten + Presse (owT) - Koenigin, 30.06.2003, 18:42
    • D Wischmeyer: Das Finanzamt - Wassermann, 30.06.2003, 18:50
    • Re: Finanzamt Würzburg - Baldur der Ketzer, 30.06.2003, 19:17