07
Feb
09

California’s State Government is Broke

In the early 80’s I read an article claiming “if California broke away from the United States, it would be the 6th richest country in the world.”  Times have sure changed, now the “Golden State” is on the ropes and could be counted out in regards to a $42 billion dollar deficit.

If you wanted to renew your Driver’s License or either change or receive your Registration last Friday, at the Department of Motor Vehicles, you were out of luck – state wide.  Many other California governmental offices were also closed, which in turn, forced the closure of many businesses across the state too.

Governor Schwarzenegger ordered furloughs for some 200,000 state government workers to help save money as he and lawmakers try to find a way to close California’s $42 billion budget deficit.

Here’s an article, posted by AP Online News Wire Service, entitled: “Government furloughs felt among capital businesses”, authored by Samantha Young, an AP writer.  Excerpts from the article below are from this article, where I have taken the liberty of high lighting what I consider important passages within the article.

Government furloughs felt among capital businesses
Samantha Young
Feb 7, 6:20 AM EST

California Budget Furloughs

California Budget Furloughs

SACRAMENTO, Calif. (AP) — Many businesses in the state capital were noticeably quiet as tens of thousands of California government workers stayed home Friday.

In this government town, Gov. Arnold Schwarzenegger’s order requiring state employees to take two unpaid days off a month is likely to dent local businesses that rely on government workers.

Schwarzenegger ordered furloughs for some 200,000 state government workers to help save money as he and lawmakers try to find a way to close California’s $42 billion budget deficit. The furloughs, which will close most state offices the first and third Fridays of each month, are expected to remain in effect through June 2010.

About 80,000 people, or roughly one in every 13 workers in the six-county capital region, are employed by state government, according to payroll data published by the state controller’s office.

Several local businesses that depend on state workers reported a drop of 40 percent to 75 percent on Friday, the first furlough day.

Matthew R. Mahood, president and chief executive of the Sacramento Metro Chamber, said furloughed state workers are not coming downtown to shop in their usual numbers. Those who do are likely to reduce spending because the furloughs will cut their salaries by 9.2 percent.

“The lack of a state budget is placing local businesses and the jobs they create at risk,” Mahood said in a statement.

“It’s going to affect business quite severely on top of the economic downturn,” Pham said. “We’re frustrated, but we’re keeping our fingers crossed the budget will be approved and we can look forward to a better year.”

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