I do not believe this vote has been scheduled unless there are indications that there are at least two Republican Senators ready to vote for the budget so that it will secure the necessary two-thirds vote, or unless the governor believes he can deliver these votes.

Let’s hope it passes. The stalemate has gone on long enough. The budget looks to be 50% tax increases and recovery and 50% budget cuts.

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Multiple commenters on Calculated Risk created new lyrics to “Hotel California” while discussing the current disastrous budget crunches in California happening simultaneously at state, county, and local levels.

“On a dark desert highway
Cool winds through my hair
Warm smell of foreclosures
Risin’ up through the air

Up ahead in the distance
I saw a shimmering light
My head grew heavy and my wallet thin
From the capital flight …

There she stood in the doorway;
I heard the Dow Jones bell
And I was thinking to myself,
’this could be Vallejo or this could be hell’
Then she gave me an SIV, and she showed me the way
There were voices down the corridor,
I thought I heard them say…

Smoke and mirrors in the budget,
red ink on the books
And she said ’we are all just prisoners here, of the lies we cook’
And in the legislative chambers,
They gathered for the feast
The stab us with their steely knives,
And this time they might just kill the beast

Welcome to the third-world, California
T’was a lovely place (such a lovely place)
Now a sad disgrace

There’s plenty of room in the third-world, California
What a nice surprise (what a nice surprise)
Goin’ chapter 9 …”

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In a scene likely to be played out in states and municipalities nationwide, things are starting to implode in California at the state level, the county level, and the city level.

The state has ordered mandatory, major cutbacks, with more coming, to deal with the projected $16bn budget deficit. The deficit was just revised upwards from $14.5bn, which virtually wiped out gains made from previous emergency spending cuts. Ouch.

The crumbling real estate market and high energy prices are expected to cause continued revenue shortfalls too. So much revenue, both directly (property taxes and fees when a property is sold) and indirectly (remodeling, real estate agents, appraisers, etc.) depended on real estate, and now those revenue streams are in free fall.

The State of California will have to massively chop budgets and also raise taxes. It’s not like they have much choice, do they? Given the high interest rates and shaky financial markets, maybe even issuing new bonds wouldn’t be much of an answer.

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