Monday, January 24, 2011 – 10:00 a.m.
It’s too late.
California, a financial train wreck, is pretty much done.
Spending addicted democrats, who control the state legislature, resist making hard budget cuts to social programs and want to raise taxes.
Republicans, a now substantially weakened minority, are nearly powerless to stop it.
I recently had a chance to speak to a member of the State Assembly who told me Governor Jerry Brown would likely peel off two republican votes in the Assembly to put his budget package on the ballot, but the Senate appeared to be standing firm.
Typical character for the usually pathetic Assembly republican caucus, not so typical for the Senate.
Apparently Senate Republican Leader Bob Dutton R-Rancho Cucamonga has his caucus in order. Unfortunately, one can’t say the same for his counterpart in the Assembly, Connie Conway, R-Tulare.
We shall see how all the posturing plays out.
Want a clear sign California is done?
How about the reaction to Brown’s proposal to scrap the state’s redevelopment funding structure.
Currently, local jurisdictions have the ability to set aside property tax increment for redevelopment. The redevelopment agencies (RDA’s), which were formed to administer the funding, may incur debt obligations repayable with future tax revenue.
In other words the RDA’s can issue municipal bonds as long-term debt.
Brown wants the RDA system dissolved and he’s right.
Redevelopment agencies have become debt-laden slush funds that have had dubious success since their creation.
Since Brown’s proposal went public earlier this month, redevelopment agencies statewide, including many in Riverside and San Bernardino counties, have approved the issuance of billions in new municipal bond debt.
Politicians from both parties have their fingerprints on this fiasco.
Apparently, when it comes to keeping the piggy-banks full of borrowed money, it’s important to both republicans and democrats.
More debt is exactly what California does not need.