Back in 2000, California had major deficits in budgets and politicians pushed to borrow 15 billion from Wall Street to cover the problem.
According to The LA Times:
Voters approved the measure, creating a pile of debt that hasn’t been paid off until now.
On Wednesday, Gov. Jerry Brown’s finance director, Michael Cohen, signed paperwork closing the book on a controversial chapter of California’s financial history.
“Today has been a long time coming,” he said.
State leaders had used the measure, Proposition 57, to borrow a little more than $14 billion, and interest and fees racked up an additional $5 billion.
“Wall Street should not be the budget reserve for the state of California,” said John Chiang, the state treasurer. He said politicians should have made “tough decisions,” like cutting spending or raising taxes, instead of borrowing money.
The improving economy has increased California’s tax revenue, putting the state on more solid financial footing with an estimated $3.5 billion in its rainy day fund by next year.
cCommentsRepublicans as well as everybody else in this state should be thanking their lucky stars we got Jerry Brown back again. He really did out-Republican the Republicans and he proved he knows what fiscal conservatism means at it’s core, balanced budgets. He put a stop to the borrow and spend…
AT 11:27 PM AUGUST 05, 2015
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However, that money could quickly evaporate in an economic downturn, placing the state back in a position of deciding whether to slash spending or increase taxes.
“Recessions can happen very quickly,” Chiang warned. “They can happen very dramatically.”
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