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July 2, 2009
Posted: 06:00 PM ET
FROM CNN's Jack Cafferty: California is on the brink of a financial meltdown. Once the richest state in the union, California has run out of money and is being forced to issue billions of dollars of IOUs to taxpayers, county agencies and small businesses.
Proposed budget cuts threaten funding For California universities, including UCLA where students here are seen passing the bronze statue of their campus mascot, the Bruin - a California grizzly bear. California's deficit was already at a whopping $24.3 billion... and the failure of the state legislature to agree upon cost-cutting measures made it grow by another $2 billion. Republican Governor Arnold Schwarzenegger wants to use deep spending cuts and borrowing... while Democrats push for tax hikes and less-severe cuts. Schwarzenegger has declared a fiscal emergency - and is giving lawmakers 45 days to figure things out. He's also ordered state employees to take a third unpaid day each month - which brings their total pay cut this year to about 14-percent. Meanwhile the IOUs could wind up causing a lot of damage - especially for small businesses that rely on state contracts. Counties will have to find other ways to fund social programs - including those for alcohol abuse, mental health and services for the elderly and disabled. And California's universities will look for other ways to help students who won't get state grants. The federal government is also threatening to seize six state parks if they're closed to help balance the state's budget. California's deepening financial crisis could be a preview of things to come for other states as money dries up and citizens brace for tax increases and cuts in services. Here’s my question to you: What should be done about California's disastrous financial situation? Interested to know which ones made it on air?
Jill writes: Benjamin from Washington writes: Abe writes: Damon writes: AJ from Greenville, South Carolina writes: Jim writes: Colleen from Charlotte, North Carolina writes: Jon from San Diego writes: Tom from Fort Lauderdale, Florida writes: Filed under: Economy
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Jack Cafferty sounds off hourly on the Situation Room on the stories crossing his radar. Now, you can check in with Jack online to see what he's thinking and weigh in with your own comments online and on TV. Send your comments on the "Cafferty File". Jack's Book
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