California on Edge of Default

Remember how the legislature and the governor "fixed" the budget with the agreement in February? How's that going?

Reporting from Sacramento -- California could run out of money as soon as July, the Legislature's chief budget analyst warned Thursday, as a new poll showed voters poised to reject five budget-related measures on the May 19 ballot.

If the propositions do not pass, the state could find itself as much as $23 billion short of the money it needs to pay its bills over the next year, according to a new forecast by Legislative Analyst Mac Taylor. The poll, from the Public Policy Institute of California, found that even as voter interest in the ballot measures rises, all are trailing except the sixth one -- Proposition 1F, which would bar pay hikes for lawmakers in deficit years.

The other measures would provide the state with as much as $6 billion in the coming year through borrowing against the California State Lottery and temporarily reducing some social services.

One proposition, 1A, which barely one in three likely voters supports, the poll shows, would extend recently enacted tax hikes until 2013, plumping state coffers by another $16 billion.

All of the proposals were placed on the ballot by the governor and lawmakers as part of a February budget agreement. That plan was intended to keep the state solvent well into next year, but it was quickly knocked out of balance by the deteriorating economy.

There will be benefits from all this. The State will be forced to scrap some really stupid things when the money finally dries up. It's just too bad that gerrymandering has made it all but impossible to overthrow the legislature.