Pasadena Chamber of Commerce

I had a chance to hear California Controller John Chiang talk about California’s financial situation last Thursday. I didn’t coma away from the meeting reassured that California will be back on it’s financial feet anytime soon.

Here’s the Cliff Notes version of what we were told: California’s legislature and governor must immediately face the emergency and work together to find budget reductions that will bring expenditures in line with revenues.

Right now, California has 60 days before we run out of money to pay all our state’s obligations. If that time passes without action by the legislature and governor,  our state will not be able to pay all its bills. The controller’s office is obligated by the state constituion and by statute to pay certain obligations first, such as bond and debt repayments, so the programs that will not be funded will be those that are not crucial, or are  not required by statute or the constitution. Mr. Chaing said it is likely the state would issue warrants for some payments to maintain certain programs, but that layoffs would have to be made, significant program cuts would ensue and obligated payments would have to be deferred.

The solution rests with our Democratic and Republic state legislators and Governor Schwarzenegger. They have to seriously discuss the problem, find achievable solutions and implement them. That likely means significant program cuts in areas that are dear to Democrats, some revenue enchancements Republicans dislike and reinstatement of vehicle license fees the governor will have no choice but to accept.

The alternative is a state that cannot pay its bills. A state with a bond rating that is so low revenue bonds cannot be issued. A state that cannot support basic services such as public education, colleges and universities, public works and road projects, prisons and public safety and social services.

A state that cannot afford to weather any emergency.

The big question we have to ask is whether our elected officials in Sacramento face the emergency and do something to address our state’s pending financial disaster.

Will Democrats and Republicans in the state house be able to reasonably discuss solutions and alternatives and come up with a workable plan within 60 days?

Our state’s financial health and our future depend on the willingness of our Sacramento representatives reaching a compromise.  It is up to all of us to convince them they must do exactly that.

Paul