California's latest state budget already is in trouble, battered by a drop in revenues and potentially facing yet another round of cuts as the so-called triggers are automatically pulled to cut costs.
From the Chronicle's Wyatt Buchanan: "California's budget already is showing signs of trouble less than seven weeks after it was enacted, as taxes and other revenue fell short by 10 percent of the state's projected income for July, Controller John Chiang said Tuesday."
"The shortfall, totaling just under $539 million in the first month of the fiscal year, raises concerns that public schools, higher education, health and social services - and other programs that lost funding because of budget tightening - could be hit with even deeper cuts midyear."
"As part of the budget plan, cuts will take effect automatically if revenue falls $1 billion short of projections for the year, though K-12 schools and community colleges would not be hit unless revenue is at least $2 billion below what is expected."
The budget's woes reflect the smoke-and-mirrors used by lawmakers and the governor to make the document appear balanced, mainly the expectation of $4 billion in tax revenues. The Bee's Dan Walters takes a look.
"Scarcely a month later, that $4 billion windfall is looking more and more like the sort of time-buying gimmick that Brown promised to shun. In fact, revenues in July, the first month of the fiscal year, ran 10 percent below expectations."
"The budget is loaded with shaky assumptions. A multi-billion-dollar raid on local redevelopment agencies is being resisted in the courts. A $150 fee on rural homeowners for firefighting is the subject of a referendum, as is a $200 million effort to collect sales taxes from Internet sellers. Reductions in medical services to the poor need a waiver from the Obama administration that appears unlikely..."
"It would appear, therefore, that Brown did exactly what his most recent predecessors did when faced with an unbalanced budget – closed the gap with gimmicks that he knew would likely fall apart. Or, as former Gov. Arnold Schwarzenegger was fond of saying, he merely kicked the can down the road."
Speaking of money, California's public employee pension fund has lost $18 billion since July 1 during Wall Street's roller coaster ride. The LA Times' Marc Lifsher tells the tale.
"It's bad, but it's not 2008," said Joseph Dear, CalPERS' chief investment officer, in an interview on CNBC. "We have a crisis induced by lack of confidence in the U.S. and European political systems, combined with gloomier and gloomier economic growth forecasts."
"Wall Street's massive stock sell-off that began last week "is a tipping point," Dear said, "but it's not a time to panic and run with fear out of the market."
"CalPERS was underweight in its stock portfolio at the close of the last fiscal year and now is "considering whether we can go back in" to make long-term investments, Dear said.
Though Dear said he didn't expect the U.S. economy to fall into a double-dip recession, he conceded that the outlook for short-term growth was not rosy."
Meanwhile, the cost of California's proposed bullet train keeps rising, with the price tag on the mammoth project now hovering around $60 billion.
From the Mercury News' Mike Rosenberg: "The latest estimates put the cash-strapped state even further behind in bankrolling its biggest, and one of its most polarizing, public works plans ever, as California struggles to secure funds from shy investors and broke governments. Still, project officials are ramping up to spend billions of dollars to break ground on the rail line in the Central Valley next year and hope to find the rest of the money to pay for the system later. It's a plan state leaders look increasingly likely to veto."
"It could be well into $60 billion, and who knows where it ends. This is really very serious and needs to stop in its tracks," said state Sen. Alan Lowenthal, D-Long Beach, chairman of the Senate committee overseeing the project. "We can't just be acting as if someone's out there giving us wheelbarrows full of money, and it's just coming. This is not the way we should be operating."
"The California High-Speed Rail Authority's new cost estimates released Tuesday show the initial stretch of construction between Merced and Bakersfield will cost $10 billion to $13.9 billion depending on how it's built. Project planners had previously pegged the section at $6.8 billion."
And now from our "Troubled Waters" file comes the tale of the tourist boat that got a big surprise when a piece of a glacier broke off and slammed into the ocean.
"Panicked tourists watched as a huge chunk of ice broke off a glacier and crashed into the water just yards from their boat at the Tracy Arm-Fords Terror Wilderness, Alaska.
Flying chips of ice can be seen splashing into the water and the boat begins to violently rock as it pulls rapidly away from the collapsing glacier."
"One female passenger on board the vessel is believed to have broken her leg after being thrown to the deck. But the boat managed to escape further damage thanks to the quick action of its captain."
"Approaching the glaciers can be extremely dangerous as they are prone to collapsing when ice melts."
No duh....
