Loren Faulkner

More Budget Cuts On The Way?
October 8, 2008

Apparently, it may happen as Governor Schwarzenegger is scheduled to meet with legislative leaders today in an emergency session to discuss budget shortfalls already upon California. The $15 billion deficit of the prior state budget had been temporarily worked out but state Controller John Chiang said there is already a $1.1 billion shortage of incoming revenue, just one month into the new budget. That is because tax revenues from income and capital gains has slowed significantly as our State feels the effects of national economic problems.

The Governor says California needs an $7 billion emergency loan and may ask for it directly from the Federal Government. He has stated that the stoppage of major credit lending from Wall Street has brought us to this point.

Again, how bad is the situation at this point? Chiang says the State government will run out of cash by the end of October if short term loans cannot be found. Stay tuned; it will be interesting to see what will happen to heavy construction contractors working on State projects if this were to happen. The current budget releases $billions to various infrastructure projects, but who knows where slicing or temporary delays might have to be made…

Posted by Loren Faulkner on October 8, 2008 | Comments (0)