Tuesday, October 6, 2009

California Budget Crisis Diaries: Costly lawsuits and late payment fees




California Budget Crisis Diaries: Costly lawsuits and late payment fees

The number of lawsuits being filed against state lawmakers and the state offices making late payments show millions of dollars down the drain. But there may be a light at the end of the tunnel as the various gubernatorial candidates put forth their ideas for fixing the budget.

The possibility of unlawful cuts: Gov. Arnold Schwarzenegger and state lawmakers have been inundated with lawsuits since they reached a budget agreement in July. Even Senate President Pro Tem Darrell Steinberg (D-Sacramento) filed a lawsuit against the governor.
If Schwarzenegger and the state lose all the lawsuits filed against them, the state could lose $4.7 billion, the San Jose Mercury News reports.

“While legal battles are common in every budget cycle, the unusually high number this year - and their potential to wreak exceptional fiscal havoc - is a testament to the drastic, even risky, measures employed to solve deficits amounting to some $60 billion,” according to the Mercury News.

“This year’s bevy of lawsuits also is the legacy of an annual budgeting process in which tax increases have become anathema and in which certain spending obligations, such as money for education, are set in stone during boom years, without any provision to pay them when revenues slip.”Read more: http://www.sdnn.com/sandiego/2009-10-06/news/california-budget-crisis-diaries-costly-lawsuits-and-late-payment-fees#ixzz0TBb9s3Vq