There’s been no real change in California’s budget crunch this week. Democrats still don’t want to cut programs and Republicans still don’t want to increase taxes; all Governor Schwarzenegger wants is a way to resolve the crisis. I don’t see anything changing in the near future, so we’ll see what happens this week.
Meanwhile, Moody’s warned that California bonds will soon be downgraded. That’s because California doesn’t have enough revenue coming in (or too much money going out in expenses).
There’s a hearing scheduled this week for the Governator’s proposal for mandatory furloughs for state employees. California Controller John Chiang, a Democrat, has submitted a brief which supports the employees. The employees may win their lawsuit which will give them a short-term victory. However, the long-term is very clear: California must drastically cut the number of government workers. That’s going to happen and if you work for the state it’s time to realize that. There simply isn’t the money for current staffing at current salaries.