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California: 55% favor bankruptcy, 17% no sure, 27% favor bailout

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
This doesn't bode well for the dozen or so states that are in VERY DEEP financial trouble and facing bankruptcy. There will likely be lots of states begging for cash this spring and summer, just in time for election season to kick into high gear. It will be interesting to watch the debates.

http://www.rasmussenreports.com/pub..._california_to_go_bankrupt_than_be_bailed_out

55% Say Better for California To Go Bankrupt Than Be Bailed Out

California Governor Arnold Schwarzenegger reportedly intends to ask this week for a federal bailout to keep his state from going bankrupt. But most voters have never been fans of any kind of federal bailout, and most continue to oppose a bailout for California, even when told what specific budget cuts may be necessary.

A new Rasmussen Reports national telephone survey shows just 27% of voters nationwide believe the federal government should provide bailout funding for California. Fifty-five percent (55%) think the federal government should let the state go bankrupt instead. Seventeen percent (17%) are not sure.

No matter how you frame the choice for voters, bailing out California is unpopular.

Schwarzenegger himself has said that California may seek $8 billion in federal funding assistance. When we ask about that request without mentioning the trade-off of filing bankruptcy, only 16% of voters nationally favor the bailout. Sixty-eight percent (68%) oppose an $8-billion bailout for California, with another 16% undecided.

Without the federal bailout, Schwarzenegger has said California will have to cut back the state’s main welfare program and reduce health care services for the disabled and elderly. He also says a 14% cut in pay for state workers may be necessary.

Just 33% of voters nationwide favor a bailout to avoid these cuts on the state level. However, 53% say the state should cut back on welfare programs, health services and the state payroll. Fourteen percent (14%) aren’t sure.

When asked about what should be done if their own state ends up in a bind like California, 49% opt for cutting back on services, 28% say the state should raise taxes, and 9% say bankruptcy is the best course of action.

As is often the case, the divide is a huge divide between Mainstream America and the Political Class on these topics. Fifty-seven percent (57%) of the Political Class favor a federal bailout for California, while 68% of Mainstream voters say the state should go bankrupt instead.
Sixty-seven percent (67%) of male voters say it’s better to let California go bankrupt, a view shared by 45% of women.

Nearly two-thirds of both Republicans (66%) and voters not affiliated with either party (64%) say bankruptcy is the better option. Democrats are evenly divided on the question.​
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
Apparently New York is in the same condition as California.

http://www.reuters.com/article/idCNN0424791320100104?rpc=44

New York state "is broke," should cut $30 bln-study
Mon Jan 4, 2010 6:39pm EST
NEW YORK, Jan 4 (Reuters) - New York state "is broke" and should cut $30 billion of spending over three years in actions ranging from freezing state workers' pay and benefits to axing aid for special education, a new study said Monday.

"Like a runaway train, New York's budget is in danger of running completely off the rails," according to the analysis by the Empire Center, a conservative Albany-based think tank.

The wellspring of New York's economy is the financial sector, which nearly ran aground last year, though some banks and brokerages have resumed making money surprisingly swiftly.

Most of the state's current $3.2 billion deficit stems from falling tax collections, the report said. But it also cited the state's recent string of billions of dollars of new spending.

Just two areas -- school aid and Medicaid, the federal-state health plan for the poor -- account for two-thirds of the budget, the report said, recommending a 7.5 percent cut in public school aid and caps on aid to municipalities and property tax relief,

With one in four New Yorkers expected to get Medicaid by 2013, the report also urged capping home care, relying more on managed care, and cutting hospital and nursing home payments.

Despite the recession, welfare grants should be withheld from people who flunk work requirements, "personal needs" payments should be trimmed and increases delayed, it said.

Though Lieutenant Governor Richard Ravitch frowns on privatizing, as investors often want 20 percent returns, the report urged this strategy for the state's three ski resorts, 27 golf courses, and six Off-Track Betting corporations.

New York City should exercise an option to buy Battery Park City for one dollar, the report said, estimating it could then pocket a $1 billion profit by selling commercial leases.

Privatizing would cut the $3 billion the state spends each year to maintain highways, subsidize bus services, fund mental health facilities, keep motor vehicle records, and manage human resources, prisons, welfare and Medicaid, it said.​
 

BigAl

Gone But Not Forgotten
SUPER Site Supporter
With all the federally mandated programs its no wonder Calif is failing . The U.S. sits on their ass and makes these up these assine give away programs and then expects the states to pick up the cost . We got a lot of problems here in Calif. This just adds to it . Left Calif fail .........
 

muleman

Gone But Not Forgotten
GOLD Site Supporter
They legislate "feel good" programs to buy votes and the costs get passed on to the states. They turn around and tax anyone and everything they can to pay for it. It all comes down to redistribution of wealth from those who work and save to those who live relying on handouts from the government. When government continues to grow and grow it just keeps the cycle going. The biggest growth in jobs is government workers to administer all these programs, not goods producing tax paying positions. If they had never interfered in private industry and banking things would already be turning around. They should have let things alone!:hammer:
 

Doc

Bottoms Up
Staff member
GOLD Site Supporter
Good post Bob. I suspect the numbers are very accurate, however, Washington never seems to care about what the people want. They didn't listen do the masses about the bail outs. They didn't listen to the masses who didn't want to go in debt for Obama Care. So I have no faith they will listen to the masses about whether or not to bail out California. California will be bailed out, cause they'll be the 1st to fail. When other states follow and start to fail somewhere along the line they'll realize they (Washington) cannot bail out all the states so it will stop there. JMHO.
 

JEV

Mr. Congeniality
GOLD Site Supporter
"Without the federal bailout, Schwarzenegger has said California will have to cut back the state’s main welfare program and reduce health care services for the disabled and elderly. He also says a 14% cut in pay for state workers may be necessary."

I love the way these thieving bastards work. THEY screw up, so aid to the poor and disabled is the first thing to go, yet, there is no mention of a single government worker being laid off or terminated. As a last resort, they MAY have to lower their salaries, but only after every other service to the people who pay the taxes has been cut back or eliminated. Just who do these people work for? Americans are really piss-poor bosses. They never fire the people who NEED to be fired.
 

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
They never fire the people who NEED to be fired.
True and that can be applied to all sorts of government levels and programs.

Some programs should simply be eliminated to save money. NPR, PBS, National Endowment for the Arts. All can loose their state and/or federal funding and exist in the commercial world with changes, but they won't make the changes and the departments are firmly entrenched. Your local town has a problem, it eliminates the 4th of July Parade as unnecessary to save some money, or it converts it to a "sponsored" event. If a state would work in the same fashion we'd have a whole lot less budgetary messes around this land.

But to those of you who are blaming the federal government for the financial ills of the state of California (or New York, or Illinois, or New Jersey or the nearly dozen other states facing bankruptcy) to you I say you are wrong. Yes it is true that federal pass through mandates tie up a good portion of a state budget, BUT there are many states that are financially weathering this recession without tax hikes and they live under the same federal mandates. Indiana is hard hit with massive unemployment in many areas but is financially in good shape. Illinois, its next door neighbor is on the financial rocks. Why? Because both states deal with their own spending very very differently. So to is the problem with California. They issues mandates on businesses that drive them out of the state, which yields low tax revenues. They drive up regulatory costs in every imaginable way, which increases the costs to operate homes, towns, cities and the whole state . . . which has driven out wealthy residents who now claim 2nd homes in CA while, for tax purposes, claim primary residence in another state. These states have made their own messes, and while the Federal government has muddied the waters, they have done so for all 50 states.

No, I don't want to bail out any other state. When their workers make more $$$ than my state workers I say give their worker's pay cuts. When the offer programs for all sorts of silliness that is beyond the scope of LIFE, LIBERTY & GENERAL WELFARE then I say cut/eliminate the program. People are resourceful and resilient when they don't have the teat of government to suckle.
 

Bamby

New member
Here's another read on the topic. Seems as if Indiana was smart enough not to take the bait and accept the stimulus dollars. The States who took the so called free money from the government now have their hands tied by law on what they can actually do or cut to manage their budgets.

Remember how $200 billion in federal stimulus cash was supposed to save the states from fiscal calamity? Well, hold on to your paychecks, because a big story of 2010 will be how all that free money has set the states up for an even bigger mess this year and into the future.


The combined deficits of the states for 2010 and 2011 could hit $260 billion, according to a survey by the liberal Center on Budget and Policy Priorities. Ten states have a deficit, relative to the size of their expenditures, as bleak as that of near-bankrupt California. The Golden State starts the year another $6 billion in arrears despite a large income and sales tax hike last year. New York is literally down to its last dollar. Revenues are down, to be sure, but in several ways the stimulus has also made things worse.


First, in most state capitals the stimulus enticed state lawmakers to spend on new programs rather than adjusting to lean times. They added health and welfare benefits and child care programs. Now they have to pay for those additions with their own state's money.


For example, the stimulus offered $80 billion for Medicaid to cover health-care costs for unemployed workers and single workers without kids. But in 2011 most of that extra federal Medicaid money vanishes. Then states will have one million more people on Medicaid with no money to pay for it.


A few governors, such as Mitch Daniels of Indiana and Rick Perry of Texas, had the foresight to turn down their share of the $7 billion for unemployment insurance, realizing that once the federal funds run out, benefits would be unpayable. "One of the smartest decisions we made," says Mr. Daniels. Many governors now probably wish they had done the same.


Second, stimulus dollars came with strings attached that are now causing enormous budget headaches. Many environmental grants have matching requirements, so to get a federal dollar, states and cities had to spend a dollar even when they were facing huge deficits. The new construction projects built with federal funds also have federal Davis-Bacon wage requirements that raise state building costs to pay inflated union salaries.
Worst of all, at the behest of the public employee unions, Congress imposed "maintenance of effort" spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs, from road building to welfare, if the state took even a dollar of stimulus cash for these purposes.



One provision prohibits states from cutting Medicaid benefits or eligibility below levels in effect on July 1, 2008. That date, not coincidentally, was the peak of the last economic cycle when states were awash in revenue. State spending soared at a nearly 8% annual rate from 2004-2008, far faster than inflation and population growth, and liberals want to keep funding at that level.


A study by the Evergreen Freedom Foundation in Seattle found that "because Washington state lawmakers accepted $820 million in education stimulus dollars, only 9 percent of the state's $6.8 billion K-12 budget is eligible for reductions in fiscal year 2010 or 2011." More than 85% of Washington state's Medicaid budget is exempt from cuts and nearly 75% of college funding is off the table. It's bad enough that Congress can't balance its own budget, but now it is making it nearly impossible for states to balance theirs.


These spending requirements come when state revenues are on a downward spiral. State revenues declined by more than 10% in 2009, and tax collections are expected to be flat at best in 2010. In Indiana, nominal revenues in 2011 may be lower than in 2006. Arizona's revenues are expected to be lower this year than they were in 2004. Some states don't expect to regain their 2007 revenue peak until 2012.


So when states should be reducing outlays to match a new normal of lower revenue collections, federal stimulus rules mean many states will have little choice but to raise taxes to meet their constitutional balanced budget requirements. Thank you, Nancy Pelosi.



This is the opposite of what the White House and Congress claimed when they said the stimulus funds would prevent economically harmful state tax increases. In 2009, 10 states raised income or sales taxes, and another 15 introduced new fees on everything from beer to cellphone ringers to hunting and fishing. The states pocketed the federal money and raised taxes anyway.



Now, in an election year, Congress wants to pass another $100 billion aid package for ailing states to sustain the mess the first stimulus helped to create. Governors would be smarter to unite and tell Congress to keep the money and mandates, and let the states adjust to the new reality of lower revenues. Meanwhile, Mr. Perry and other governors who warned that the stimulus would have precisely this effect can consider themselves vindicated.



http://online.wsj.com/article/SB10001424052748704152804574628633460370644.html#mod=todays_us_opinion
 
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