Monday, February 16, 2009

No Quick Loans For California | Budget Fails to Pass

Quick loans could help California

California lawmakers had a rough weekend with nothing to show for it.

California lawmakers had a tough weekend with nothing to show for it.

Looks like California could use some quick loans right about now. The state with the world’s eighth-largest economy can’t seem to get its budget on track. Even after lawmakers worked through the weekend, the state must continue budget negotiations.

Rough rules

California has a couple of things working against it. First, the state requires that two-thirds of the legislature approves the budget. The last word on the $40 billion proposed bill was that it was one vote short of passing. But a vote is a vote.

Secondly, the state’s constitution forbids running at a deficit. So unless California can get some quick loans for more than $40 billion, it needs to make cuts and raise cash.

Cold cuts

Cutting is exactly what the state will do. The California government has cut down on the cost of employee salaries by forcing some state employees to take unpaid leave. The state is also planning an additional $15.1 billion in spending cuts.

New taxes

The budget now contains higher sales tax, income and gasoline taxes and higher vehicle licensing fees. Some of these measures will be put up for a vote in May. So, even if California lawmakers do reach an agreement and sign the budget, they could face more challenges later. ... click here to read the rest of the article titled "No Quick Loans For California | Budget Fails to Pass"

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