Schwarzenegger warns California is almost broke

[BankruptPinoy]

http://www.independent.co.uk/news/world/americas/schwarzenegger-warns-california-is-almost-broke-1047674.html

[Bandit]

The state that makes more money than any other state is almost broke?

[BKOnce]

Yes Sir! ... done by our American Hero =>> Arnold to be scold!

[junker]

living in California, and hearing about the defict makes me laugh, i hear on news they say cigarette smoking is down, because tax revenues are much less than they were before the massive tax increases to punish smokers.Now everyone i know that smokes, goes to the indian casinos to buy their cigarettes, there is no taxes on them there. so instead of paying 50 bucks a carton they are able to buy them for 18 bucks a carton and probably smoke more now. many are willing to drive a 100 miles to a casino and buy a months supply rather than pay the 50 bucks a caron. also some have theirs shipped from out of state. a carton of cheap smokes will cost 17 bucks from Florida. so you can imagine the lost revenue from taxes. Keep up the good work Gov.

[magyar123]

California has already cut many poor folks' assistance programs. Last year the state paid my Medicare premiums because Social Security and a real small pension amount were my only sources of income. In 2009 they won't. In 2007 I received something called the renters' rebate, $350 one shot amount because I'm a renter on SS. This year, 2008 didn't get that.
Typical Republican BS to cut programs for the poor/elderly.

[JRScott]

The problem California and many of the states of the Union face is the same problem faced by many Americans. Lack of long term financial planning.

Many of the states spent all they could in good economic times, such that when economic times are bad they cannot maintain that same level of services. Most of them did not put any into a rainy day fund for when times might not be as good.

As a result they have programs and services now that they cannot pay for on existing revenue. If they raise taxes they'll actucally take in less money not more. Whatever the tax rate the revenue stream remains a fairly constant percentage of the GDP. If you raise taxes GDP shrinks, if you lower taxes GDP grows.

The Federal Government is in the same shape, worse really than most of the States. The truth is that they are going to have to cut out a lot of programs/services in order to just provide the basics. It might not be this year or next, but it'll come to that front within the next two decades.