The views expressed in any article published in this blog are the author's own and do not necessarily reflect the views of Joseph Foster or Bob Lupoli.

Tuesday, January 31, 2012

The Sweet California Cash Scam - Browndoggle

Joe:  see below California Politicians are killing California and America. In this troubled economy, they overspent by $2.6 billion. We are going to run out of cash and the stupid California High Speed Rail is now estimated to cost three times as much – in other words the politicians lied, again. The stupid LA Times still thinks we should go for it. I think Margaret Thatcher said it’s easy to spend other people’s money. By the way the rail situation is now being called a "BROWNDOGGLE" after Jerry Brown. -Bob
California will run out of cash
January 31, 2012

California will run out of cash by early March if the state does not take swift action to find $3.3 billion through payment delays and borrowing, according to a letter state Controller John Chiang sent to state lawmakers today.

The announcement is surprising since lawmakers previously believed the state had enough cash to last through the fiscal year that ends in June. But Chiang said additional cash management solutions are needed because state tax revenues are $2.6 billion less than what Gov. Jerry Brown and state lawmakers assumed in their optimistic budget last year.

Meanwhile, Chiang said, the state is spending $2.6 billion more than state leaders planned on.
The Assembly budget committee approved a bill today that would enable $865 million of borrowing from existing state accounts, Senate Bill 95. Chiang, after consultation with the Department of Finance and state Treasurer Bill Lockyer, is also seeking about $2.4 billion in delayed payments to universities, counties and Medi-Cal, as well as additional borrowing from outside investors.

Absent these actions, the state would fall below its prudent $2.5 billion cash cushion on Feb. 29, Chiangestimated. On March 8, the state would actually end up $730 million in the red. The state would be below the safe cash cushion for several weeks ending April 13, save for several days at the end of March.

With such actions, Chiang believes the state would not have to use IOUs or delay tax refunds, maneuvers that have been relied upon in previous years. But Chiang also said that "more cash solutions may be required if our revenues continue to erode or if disbursements significantly exceed estimates."

California borrows money early each fiscal year because the state has regular monthly expenses but receives the bulk of its tax revenues in the spring. The state borrowed $5.4 billion last fall for this purpose.

California High-Speed Rail Authority

Still on board the bullet train


Yes, the price tag has tripled and its completion date is 13 years later. But it's still a gamble worth taking.

It's easy to see why many Californians are losing patience with the bullet train.
Voters who were asked in 2008 to approve $9.95 billion in bonds to build a high-speed rail line from Los Angeles to San Francisco were told the project would cost $33 billion and be completed by 2020, yet a more realistic business plan released Tuesday by the rail authority placed the price tag at — whoops — $98 billion and the completion date at 2033. The project has been hitting political snags at every turn, prompting raging disputes over routing decisions, proposed land seizures and its alleged interferencewith freight lines. So fed up is state Sen. Doug LaMalfa (R-Richvale) that he's planning to introduce a bill asking voters to reconsider the original bond measure, even as Republicans in Congress threaten to block future federal funding.

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