1/3/11

"States will contend with about $140 billion in deficits in the next fiscal year"

"Jerry Brown returns as California governor today after an absence of almost three decades, facing a “day of reckoning” over a $28 billion budget gap...

Brown...has pledged an austerity budget, due Jan. 10...told Californians they’ll face painful choices to restore fiscal health.

...States will contend with about $140 billion in deficits in the next fiscal year after closing $160 billion in gaps this year...

...The reductions may include eliminating local redevelopment agencies, shrinking social-services benefits, slashing aid to state universities and closing parks...

...The governor inherits the nation’s third-highest unemployment rate at 12.4 percent, what the treasurer’s office says is $88.3 billion of bond debt and as much as $500 billion of pension liabilities following the longest recession since World War II.

...Curbing the cost of state workers’ salaries and their pensions may put Brown at odds with the labor unions that supported his campaign, such as the 120,000-member California Federation of Teachers.

...Payments to the two public-employee pensions, the largest in the U.S., will consume 5 percent of the general fund."

Michael B. Marois

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