California Struggling To Stay Afloat

CBS Evening News: The Golden State Is Running Out Of Money - And Local Business Is Paying The Price

(CBS)  The folks at Superior Produce are getting squeezed. The Sacramento business provides fruit and vegetables to nine prisons. Now they're being stiffed by their biggest customer - the state of California.

The state owes Superior $250,000 for last month alone, reports CBS News correspondent Ben Tracy.

"If we ran our business the way the state runs the state we would not be in business for 22 years," Cindy Mulhern, owner of Superior Produce, said.

When the state fell behind last year, the Mulherns had to take out a line of credit on their home just to stay in business. This time could be worse.

"The truth is that California is in a state of emergency," said Gov. Arnold Schwarzenegger.

The truth is that California is broke.

Its $15 billion budget deficit is expected to widen into a $42 billion chasm.

The governor and the legislature can't agree on a fix, and every day the state gets deeper in debt.

"We are unable to pay all of the state's bills that come due this month," said California state controller John Chiang.

To stop the bleeding Chiang is halting nearly $4 billion in payments due to state vendors, grants to college students, and funding for organizations serving the disabled.

Although 2.7 million Californians are expecting income tax refunds this month, they will have to wait. The state doesn't have the money.

One California taxpayer, a mother of twins who said she's expecting a refund, Selene Lockerbie, said, "I feel like I've been robbed! I feel like I've been robbed!"

To conserve cash, more than 100,000 road projects, worth $2 billion, have come to a halt while state-funded buildings are left half-built.

Beginning this month, the governor is ordering state offices closed on the first and third Fridays - forcing state employees to take two days each month without pay.

Normally California would just borrow its way out of this mess, Tracy reports. But now it can't even do that. It's hard for the state to get money now, because its credit rating is the lowest in the country.

The state is hoping for a federal bailout, but the governor is looking for revenue everywhere, proposing to tax rounds of golf, auto repairs, veterinary care, and even amusement park tickets.

"Pray for California, 'cause we don't know what's gonna happen over the next few weeks," said Dan Walters of the Sacramento Bee. "This could be really, kinda, the real Armageddon."

It's an economic earthquake already rattling the suddently not-so Golden State.

[greggnjames]

to: ********* (first post)
250,000 for vegetables for 9 prisons you say is too much. That may be so but it isn''t the wrong people, yeah some people are in there for the right reason, some are not. Do you even know any prisoners? have you met any. My partner of 9 years is in there due out in about 2 and is one of the nicest guys who would do practically anything for anyone. And he tells me most of the vegetables and very few fruits they get are garbage hardly fit for human consumption so instead of saying that they are the wrong people maybe you need to look at the vendor and if the average prison is keeping 7,000 inmates, x 9 thats 63,000 inmates. when was the last time you went grocery shopping and tried to get 3 meals worth of veggies for under 3.00 kind of rough.

Lets look at the administration for the problem not the vendors. they are people like you and I.

Also look at the prison system itself it has THE states biggest political unions in existence most guards make in the range of $70,000 a year excluding overtime. What do you make a year?

Have a good day!!!

[fagsnaids]

QUARTER OF A MILLION DOLLARS $250,000.00 for fruits and vegetables A MONTH.....and this is from convicts...

and you wonder why this state is broke??

we spend too much money on the wrooooong people..

[pizzanick]

Arnold is not the problem. It''s special interest groups like the state employee unions and the spendthrift Democrats in the state legislature that won''t budge on cuts. Also, the Republicans turds who put Arnold in power don''t even communicate with him for the last two years. They don''t have any better solutions other than to cut the arms, legs, head, and everything but the heart. I hope Gray Davis is laughing about this over a glass of chardonnay from Sonoma Valley!!!

[whatnow12]

It is very unfortunate that "Arnold" has brought down such a beautiful state. Most of California is nothing like L.A. and Hollywood. Decent people trying to live a decent life. Like most politicians, Arnold does not seem to realize that you cannot keep taxing the middle class to pay for the toys of the rich. How about stiff taxes for luxury cars, jewelry and private schools? High property taxes for million dollar homes? Finally, how about extremely stiff fines for the rich caught employing illegal aliens?

[tiredofthebs]

Time to recall Arnold Schwarzenegger and vote in Gray Davis again .....

Posted by jerr11 at 12:16 AM : Feb 05, 2009

Amen to that!

[jerr11]

Time to recall Arnold Scheissenegger and vote in Gray Davis again.

That''s what you get when you vote for a washed up Austrian steroid zombie.

[fagsnaids]

GET RID OF SOCIAL WELFARE PROGRAMS FOR ILLEGALS..PROGRAMS FOR CRIMINALS..SCHOOLING CHILDREN OF ILLEGALS..cut wastfull spending on all levels..

get rid of all the parasites..

[fagsnaids]

Posted by ubrew12 at 11:20 PM : Feb 04, 2009
+ report abuse

****

nah the real problems is arnold forgot to get rid of all those liberal welfare programs and such..FRUITS AND VEGTABLES FOR CRIMINALS...want to pay for that??

[ubrew12]

Let be clear about how California got here:

Grey Davis, the newly elected governor, raised car registration fees to close a gaping budget hole.

State Republicans then financed a recall effort, paid Mexican immigrants to canvas supermarkets for petitioners, and got 12% of the population to overturn a majority vote (bet the Iraqi''s would love that kind of ''democracy'').

The resulting circus sideshow gave Gary Coleman and a hooker a potential shot at the governorship but, in the end, Swartzenegger was chosen. He promptly recinded Davis'' rise in car registration fees...

and HERE WE ARE!!! As if no one could have foreseen it! California Republicans are ANARCHISTS. There''s no other word for it. They''d rather see the state (and the country) burn than get less than everything they demand. This is NOT a democracy.

[dnsallday]

As California goes, so goes the nation.
America will fall, one state at a time.
5% of Americans will be wealthy beyond their wildest dreams. The other 95% will be forced into servitude.
Americans have been beaten into submission and will passively accept whatever gets thrown at them.

As the wealth of the country has been transferred rapidly to the rich and well connected over the past 8 years, many Americans still regurgitated whatever they where told to believe. Even as their standard of living dropped further and further.