State's Rights? Taxpayer's Rights?

[Guest]

The State of California is in a heap of financial trouble. Following the lead of the members of the U.S. Congress, the state went on a spending binge over the last 4-5 years. Now the decline in the state's economy has resulted in a drop in their revenues amounting to more than 20% of the state budget.

In last week's election, California residents soundly rejected several of the ideas set forth by their governor to try to balance the budget. Their problem remains.

But it gets worse. It takes 2/3 majority plus 1 in the California legislature to even pass a state budget. Their state legislature, with all their regional and special interests, has had absolutely no success in even coming close to establishing a budget that would both be balanced and also be passable.

Now Governor Schwarzenegger is proposing that the U.S. government guarantee the repayment of the general obligation bonds that California will have to issue in order to pay it's expenses. It's been projected that within months, California will be unable to pay it's bills or service it's debt. Others have opined that if the U.S. government were to agree to guaranty the debt of California, that the AAA risk-rating of the U.S. would almost certainly be jeapordized.

All that seems to raise a couple of questions...
Should the U.S. government provide financial assistance, such as guaranteeing bond debt, for California or any other state?
If the federal government did agree to backstop a state such as California with taxpayer's money from the other states, should the federal government become involved in the governance of the state? As an example, if the federal government were to guaranty California bonds, should it assume a role of establishing and approving a state budget that would assure that the fed guaranty would not be called upon? Should the federal government establish what the state should spend money on? Should the federal government become involved on the revenue side by dictating additional state taxes which might be necessary to balance the state budget. Basically, should the federal government supercede the California legislature because of their proven incompetence in managing the state's financial affairs.


Just a couple of questions to be considered.
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My answers:
Question #1 - NO
Question #2 - Not applicable

I provide these answers with the full understanding that the economy of the State of California is the equivalent of the seventh largest country in the world. And if California were to default on it's debt obligations, or be unable to issue additional debt, it would be the equivalent of a bankruptcy that would make that of GM and Chrysler pale by comparison. Financial failure for an entity as large as California would have disastrous effects on the economy of the U.S., if not the world. There is no Chapter 11 for state governments.

[Guest]

The State of California is in a heap of financial trouble. Following the lead of the members of the U.S. Congress, the state went on a spending binge over the last 4-5 years. Now the decline in the state's economy has resulted in a drop in their revenues amounting to more than 20% of the state budget.

In last week's election, California residents soundly rejected several of the ideas set forth by their governor to try to balance the budget. Their problem remains.

But it gets worse. It takes 2/3 majority plus 1 in the California legislature to even pass a state budget. Their state legislature, with all their regional and special interests, has had absolutely no success in even coming close to establishing a budget that would both be balanced and also be passable.

Now Governor Schwarzenegger is proposing that the U.S. government guarantee the repayment of the general obligation bonds that California will have to issue in order to pay it's expenses. That seems to raise a couple of questions...
Should the U.S. government provide financial assistance, such as guaranteeing bond debt, for California or any other state?
If the federal government did agree to backstop a state such as California with taxpayer's money from the othger states, should the federal government become involved in the operation of the state? As an example, if the federal government were to guaranty California bonds, should it assume a role of establishing and approving a state budget that would assure that the fed guaranty would not be called upon? Should the federal government establish what the state should spend money on? Should the federal government become involved on the revenue side by dictating additional taxes which might be necessary to balance the state budget. Basically, should the federal government supercede the California legislature because of their proven incompetence in managing the state's finanicla afairs.


Just a couple of questions to be considered.
------------------------------------------------------------------------------
My answers:
Question #1 - NO
Question #2 - Not applicable

I provide these answers with the full understanding that the economy of the State of California is the equivalent of the seventh largest country in the world. And if California were to default on it's debt obligations, or be unable to issue additional debt, it would be the equivalent of a bankruptcy that would make that of GM and Chrysler pale by comparison. Financial failure for an entity as large as California would have disastrous effects on the economy of the U.S., if not the world. There is no Chapter 11 for state governments.Easy answer NO! Our country only collected 300 billion in tax revenue last year. We can't afford to bail out GM, yet alone Calif. Good grief, stop the insanity!

[Guest]

All that seems to raise a couple of questions...
Should the U.S. government provide financial assistance, such as guaranteeing bond debt, for California or any other state?
If the federal government did agree to backstop a state such as California with taxpayer's money from the other states, should the federal government become involved in the governance of the state? As an example, if the federal government were to guaranty California bonds, should it assume a role of establishing and approving a state budget that would assure that the fed guaranty would not be called upon? Should the federal government establish what the state should spend money on? Should the federal government become involved on the revenue side by dictating additional state taxes which might be necessary to balance the state budget. Basically, should the federal government supercede the California legislature because of their proven incompetence in managing the state's financial affairs.


Just a couple of questions to be considered.
------------------------------------------------------------------------------
My answers:
Question #1 - NO
Question #2 - Not applicable

I provide these answers with the full understanding that the economy of the State of California is the equivalent of the seventh largest country in the world. And if California were to default on it's debt obligations, or be unable to issue additional debt, it would be the equivalent of a bankruptcy that would make that of GM and Chrysler pale by comparison. Financial failure for an entity as large as California would have disastrous effects on the economy of the U.S., if not the world. There is no Chapter 11 for state governments.


No.
The California taxpayers have enough money to bail themselves out. They just need to be convinced of the necessity. :beer3:

[Guest]

California's problems are not uncommon.

At my previous residence (Montgomery County, Maryland) the county government made the same basic mistakes in its business decisions. They believed the real estate boom was never going to end, and that housing prices would continue to rise at 10% or better each year. Since real estate taxes were based on a 100% valuation assessment (and adjusted every three years to allow for value gain) the county figured that the money faucet was going to be opened more and more each year. So, they made long-term contracts for services, labor, new roads, new buildings, et cetera based on what they thought their future income via taxes would be.

Lo and behold, the real estate market busted. So, the county upped the millage to make up for the reduced property valuations, trying to continue the county money flow. As a result, everyone's property taxes rose to stratospheric levels.

California has a lot of choices, just like any government. As an example, it's contracts for "whatever" should have protections to allow for early termination, as this is a normal governmental practice. Yet, the state seems to expect to have "it's cake, and eat it, too," and stick someone else with the tab.

Then again, that's what Chrysler, Ford, GM and a host of financial institutions have done - with a Congress too lazy to even read the legislation it signs. Now that the prior bailouts have occurred, we can expect the parade of beggars to continue from all sides.

[Guest]

No, and the tax payers shouldn't be made to bail anyone out. Why should the tax payers always get screwed because of governments incompetency?

They can do like the rest of us. CUT CUT CUT.

[Guest]

I still live in CA. (unfortunately) and I believe this state is like a ship, headed to the bottom, fast!
Not only did the state government not establish a budget in a timely manner, then they turned around and asked the people of this state to extend new guarantees to make that OK. They spent additional millions to try a special election that would give them even more money to squander. That was squashed with a nice majority. Their response is, business as usual, we take your money and give it to who ever we feel like giveing it to.
I am finsihed voting in California, they should place a special note at the bottom of every ballot these days saying, your vote counts until reviewed by the state or federal court, at which time all bets are off and we will do what we want anyway.
If the current federal administaration allows Cal. to burden the federal taxpayers with this problem it will open the doors for all the rest of the states to join in. This counrty is already out of money and the idea of just printing more is something my father told me about during the depression. It's called inflation and the cost of a loaf of bread might reach that $100 he alwasy warned me about.
No, Cal. got it's self into this mess, I should say the govenrment of Cal. got us into this, and they alone are responsible for getting their own state out.
Stop funding every crazy idea that comes along. Stop passing laws just to show your local consituents that you care (it does'nt work). Stop allwoing illegal aliens free school, health care and .................

........OK hunny I'm sure these fine people will understand.

I have lived in CA. for all my 55 years and am sick at what has happened, so the short answer is NO!

[Guest]

As a side note, I was born in CA and lived in San Diego for 48 years. We escaped the madness a year ago and never looked back. My only regret is I should have left 25 years ago.

[Guest]

The answer should be not only, ‘no’ but, ‘Hell No’!!
Through our Federal government we have abandoned the concepts of individual responsibility, local government responsibilities and increasingly state responsibilities. In any disaster prior to The Great Society programs; people, local communities and states were responsible for themselves. Thaïs was true for the Galveston Hurricane, the Chicago fire, the San Francisco earthquake, the numerous floods of the Missouri and Ohio rivers, etc.

When Uncle Sugar said, “I will take care of you.” things changed rapidly. I have watched the news as the people of Volusia County demanded that the Federal Government pay to rebuild their homes, despite the fact that they chose to live in a flood plain and did not purchase flood insurance. I will not even begin to discuss my feelings about New Orleans or the Florida barrier islands.

My feelings on the subject are fairly simple:

1. The nation at large has no responsibility for your local problems
2. States have no business underwriting insurance for home and business owners. If you need insurance, buy it yourself on the open market.
3. If you are hit by a foreseeable disaster – tornados in Kansas, Hurricanes in Florida and/or Long Island, flooding when you live in a below sea level, earthquakes in California, etc. – that is your problem – not ours. You can buy flood and earthquake insurance. The same for local governments – if you have not taken reasonable financial safeguards, don’t ask us to bail you out.
This is just my call for personal responsibility. Just JMHO.

Wayne