Among the cuts to close the gaping $20 billion California deficit could be welfare programs “including the main one that provides cash and job assistance to families below the poverty line.” That sounds like food stamps to me. So, those least able to survive will be hurt the most. They of course are also the least politically powerful.
But there will be no tax increases, says Arnold. He doesn’t believe it’s “the right thing to do.” Given the insane California law that budget matters must pass by two-thirds, a tax increase has no chance of passing anyway. So, California continues on its Highway to Hell. It has the lowest credit rating of any state, high unemployment, huge amounts of unfunded mandates, and declining tax revenue.
How bad is it in California? Imperial County in the south, which is mostly farming, had an unemployment rate of 27% as of March 2010, one of eight counties with unemployment higher than 20% (PDF). Those are the official rates. The actual rate is of course much higher.
The plain cold facts are that California doesn’t have the money it needs and can’t borrow it, except at usurious rates. Tax increases won’t pass. It must slash and burn on spending, there is no other option. And it’s going to get ugly.