This is actually an expanded follow-up to our earlier post of January 12, 2013 — (click here) concerning the optimistic California state budget just revealed by Governor Brown. For today’s revelations, see Evan Halper and Chris Megerian, Debt a Cloud Over State’s Future, January 14, 2013, at p. A1. What it tells us is that the governor’s statement of a couple of days ago appears to be so much BS. In the above-cited article, the L.A. Times informs us that the state’s actual financial condition is a not-so-slow-motion disaster getting ready to unfold. Quoth the Times:
“Sacramento is legally obligated to pay many billions of dollars withheld from schools, local governments and healthcare providers as lawmakers struggled repeatedly to balance the books. It owes Wall Street more per resident than almost every other state. And it has accumulated a crushing load of debt for retiree pension and heathcare, now totalling more than taxpayers spend each year on all state programs combined.
“The budget Brown proposed Thursday addresses only a small portion of the overall debt, which stems from the same type of bills that drove such cities as Vallejo, Stockton, and San Bernardino into bankruptcy. The state is likely to find the debt consuming an ever larger share of money meant for the basic needs of government.
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“Brown’s repayment plan does not significantly reduce the sizable debt to Wall Street or account for promises the state has made to its current and future retirees but is not setting enough money aside to cover.”
That says it all, doesn’t it?