Latest Califonian Budget
July 29, 2009 by admin
After the budget deal was presented by the California governor a lot of people were hurt and they expect the budget would crimp the states recovery from the recession. Economists suggest that the California’s economic hard ship would stay longer compared to the other states. They are of the opinion that this budget will only enhance the recessionary blows and also is likely to see an unemployment rate of 11.6%. The same would also be accompanied by decline in the real estate market. The governor suggests cost cuts for higher educations and for prisons. The final closure happened with an agreed slashing of $15.6 billion. The major impacted areas were kinder garden schools and the community colleges – $6 billion; Higher education – $2.8 billion; state-worker furloughs – $1.3 billion; State health care plans – $1.3 billion and from the state prisons – $1.2 billion.
The governor and other democratic leaders said they were not left with much choice than cutting down on the state’s health budget. As a part of the budget package the credit rating agencies would also be stopping the credit rating agencies from any further down rating of the state. This gap closing plan is plan is quiet likely to play a crucial role in the ability of people to borrow money. As that would help to, continue monetary pump-ins, into the states economy.
An analyst from the Standard and Poor’s, is of the opinion that California is presently rated the lowest amongst the 50 states, and the state might further be downgraded. The reason being that the revenue forecast is a bit too optimistic and the fixes used are very unconventional.
The California economy is a $26 billion issue from a $12 trillion US economy and not all the economists are pessimistic about the long term impacts, those would be caused by the cost control. They are of the opinion that this situation is bad but not actually a disaster. According to Mr. Noll a Stanford economist this budget is a quick fix and this would only push the problems to the next year. For example the pay checks of the Government employees being pushed to the July 2010 from June 2010.
In the short run, some struggling cities and counties may witness hard times, due to the lay off of the teachers and the pay chop offs for the government employees. Mary Canoy a lady, who works on a degree at Cypress College and is a mother of three, expects a drop in her pay check again and that would put her in financial hardship. Leaving her no choice other than, selling her car. She terms this situation as “Poverty’.
