Financial Woes Grow For California, Florida
More well-known for their sunny weather than stormy finances, both California and Florida— along with their residents— are suffering from the lousy economy. Bloomberg’s Michael B. Marois wrote Wednesday:
California’s budget deficit may widen to almost $21 billion by next fiscal year as the most populous U.S. state’s economy continues reeling from the global recession, its top fiscal analyst said in a report today.
The current $85 billion spending plan Governor Arnold Schwarzenegger signed in July is likely to fall more than $6.3 billion short by year-end as several provisions within the budget falter or miss revenue projections, Legislative Analyst Mac Taylor said. That gap is in addition to a deficit Taylor said may reach $14.4 billion in the fiscal year beginning July 1.
“Addressing this large shortfall will require painful choices — on top of the difficult choices the Legislature made earlier this year,” Taylor said…
Since February, Schwarzenegger and lawmakers have slashed $32 billion from spending, cutting into funding for schools, universities and welfare programs. They also raised taxes by $12.5 billion to balance the budget enacted July 28.
The Los Angeles Times’ Catherine Saillant had more to say about university funding cuts. She wrote last night:
A daylong occupation of a classroom building at UC Berkeley on Friday ended with the arrests of 41 students who had barricaded themselves inside to protest budget cuts and steep hikes in student fees, university officials said.
Student anger erupted earlier this week after a 32% fee increase was approved by the UC Board of Regents on Thursday. The hikes will add $2,500 to undergraduate fees by next fall, bringing basic annual fees to $10,302. Room, board and books can add $16,000. ..
Student protests have erupted at other UC campuses in recent days. Thousands at UCLA, UC Davis and UC Santa Cruz have held mostly peaceful rallies and demonstrations.
In addition to California, the sunshine-filled state of Florida also shares its economic pain. Particularly its business owners. The Associated Press’ Bill Kaczor wrote Thursday:
Unemployment compensation taxes paid by Florida businesses will skyrocket next year due to the state’s high jobless rate that hit 11 percent in September, revenue officials said.
The minimum tax will jump from $8.40 per employee to $100.30 — an almost 12-fold increase — while the maximum will go up from $378 per employee to $459.
The exact amounts for each business will be based on a formula that includes benefits paid to its former employees over the past three years…
Florida is among 33 states that will increase unemployment compensation taxes next year, according the National Association of State Workforce Agencies.
Sources:
“California Deficit May Reach $21 Bln, Analyst Says (Update1)”
Michael B. Marois
Bloomberg, November 18, 2009
“41 arrested in UC Berkeley protest”
Catherine Saillant
Los Angeles Times, November 21, 2009
“Fla. unemployment tax on businesses to skyrocket”
Bill Kaczor
Associated Press, November 19, 2009
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