19th May 04:41
President Norquist and VP Bush ecstatic over their victory!
Published on Saturday, July 5, 2003 by the Guardian/UK
Public Services at Risk as US States Face Financial Crisis
by Duncan Campbell in Los Angeles
The street lights may still be twinkling on Sunset Boulevard and the sun may
still come up every morning over the Mojave desert, but California could
soon be plunged into fiscal darkness.
The state with an economy the equivalent of the world's fifth largest nation
is bust, and a crisis which could lead to mass lay-offs and collapse of the
public education system is in the offing.
California is just one of many states facing the worst financial crisis for
Nevada, smarting from a decline in tourism and a loss of gambling revenues
to the growing number of reservation casinos, is facing a deficit of up to
To deal with the shortfall, it is introducing a novel live entertainment tax
of 10%, which will apply to the state's brothels, legal in 10 of Nevada's 17
counties. The state's many strip clubs would also have to pay the tax.
Elsewhere, New York's police officers are leading the drive to plug a
potential $4bn deficit in the city's budget, fining anyone they can for
anything they can think of.
One man was ticketed for sitting on a milk crate outside a shop; the
citation was "unauthorized use of a crate".
Alabama has been facing a deficit of $700m and now the governor, Bob Riley,
a conservative Republican, has announced the biggest tax changes for 100
"We cannot balance our budget with cuts alone, not unless we are willing to
lay off thousands of teachers and cancel all extra-curricular activities,
open prison doors and put convicted felons back on the streets, and force
thousands of seniors out of nursing homes and take away their prescription
drugs," he said.
There are also budget crises in Oregon, Connecticut, New Hampshire and Rhode
In Connecticut, the Republican governor, John Rowland, is now running the
state by executive order, making ad hoc decisions on which of the state's
mounting bills get paid until a budget is agreed.
But it is in California that the meltdown is most spectacular. The state has
a deficit of $32bn and desperately needs to agree a new budget. The
Democrats, who control both the state senate and assembly, want to put half
a cent on the sales tax and make some cuts in public services.
The Republicans, whose support they need to pass the budget with the
required two-thirds majority, have suggested an alternative which would mean
mass lay-offs of public employees, closure of college courses, and putting
back by a year the age for entering kindergarten.
Into this stew has been added a spicy political ingredient. Democrats
believe the Republicans are being encouraged by the White House to cause
chaos in the hope this will lead to the recall of the Democratic party
governor, Gray Davis, and his replacement with a Republican, possibly Arnold
Mr Davis is fighting his corner. "I will not sign a budget that slams the
door on more than 100,000 kindergarten students," he said this week.
The Democrats have warned that if the Republican budget were adopted, with
its cuts in prison costs, it would mean freeing 20,000 prisoners.
California has the lowest credit rate of any state, but others are facing
problems of varying magnitude.
The stuttering economy is blamed for the chaos as taxes once generated by
capital gains and stock options in the wealthier states in the boom years
Growing unemployment, which reached a national nine-year high of 6.4% in
June, means people are buying less, thus cutting sales tax revenues. And
most states have used up their "rainy day" funds over the past two years.
"Every gun that is made, every warship launched, every rocket fired,
signifies in the final sense a theft from those who hunger and are not fed,
those who are cold and are not clothed."
President Dwight D. Eisenhower
April 16, 1953