Thursday, September 25, 2003
More California budget problems: A federal judge has taken the California government's credit card away.
judge has blocked as unconstitutional the state's plan to borrow nearly $2 billion to pay for employee pensions, part of the more than $15 billion in borrowing lawmakers relied on to balance the budget.
If upheld on appeal, the judge's preliminary opinion could raise legal questions over other planned bond sales in the $99 billion budget signed by the governor early last month, and possibly lead to further cutbacks and new taxes.
Superior Court Judge Thomas M. Cecil ruled orally Tuesday that the sale of bonds approved in the Legislature violated a portion of the state Constitution which bans borrowing more than $300,000 over several years to pay for routine spending.
Boom! This year's budget crisis is still unsolved. This could spell doom for Gray Davis' hopes of defeating the recall. Davis' poll numbers climbed after the legislature passed, and he signed, the current budget plan. If that "solution" turns out, on appeal, to be invalid, then expect Davis' numbers to head downward into the abyss once more.