California facing possible 11 billion $ deficit next year as housing, economy drop

California faces potential $11 billion deficit in budget next year
Tom Chorneau, Chronicle Sacramento Bureau
Wednesday, November 7, 2007

(11-07) 04:00 PST Sacramento --
The meltdown in the housing market and slowing California economy are likely to create a shortfall in the state budget next year of as much as $11 billion, according to estimates made Tuesday.

In response, Gov. Arnold Schwarzenegger has asked department heads to stop spending what they can today and prepare for bigger cuts next year, according to legislative sources.

Schwarzenegger won re-election in 2006 in part because of the perception that he had restored order to the state's chronic spending problems. But the deepening slump in the real estate market, combined with risky assumptions from this year's $145 billion spending plan, have resulted in a return of the big imbalance between what the state takes in and what it spends.

The governor and Legislature will face yet another difficult budget in 2008 that will require either deep spending cuts across the board or perhaps consideration of new taxes - something the Republican governor has resisted in the past.

more:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/07/BAM5T7DPN.DTL

That great "Bush" economy strikes again- wasin't it just 2-3 years ago that all the states were in trouble from the lousy economy post 9-11?

to Bush, but then I realized that nothing. We ALL know he's to blame not only about our situation here at home, but for a huge chunk of the world's problems.

So my question is - what can we DO?

Can the next president really help turn this around? And I mean that in a general way, assuming the next president is a Dem and truly CARES about what's happening. I know all of the candidates have given their take on it and promised to get us headed in the right direction again, but can s/he really? Is it too late? What does our future look like even if steps are taken as soon as possible?

Cut the war borrowing, and cut the crony crap wasting of money, and things will start to get better. If Iraq is left alone I suspect within a few years they will be working hard to get their oil pumping (only source of income for anyone once we leave) so that improves the supply situation.

Really, so many things are screwed up because we have people running things who DO NOT CARE AT ALL about their jobs it is astounding. Change that and I suspect the relief factor alone will bail us out temporarily.

Finally, someone will need to address the longer term deficit stuff by reversing the tax cuts to the rich and the incentives to offshore biz. But I ain't holding my breath on that one, no matter who wins.