Less than four months after California leaders stitched together a patchwork budget, a projected deficit of nearly $21 billion already looms over Sacramento, according to a report to be released today by the chief budget analyst.
Yeesh. And unlike the Federal Government, California cannot print money or use quantitative easing to deal with the shortfall. Things are so bad that California is researching ways to declare bankruptcy:
California's finances have been so bad that the governor's finance director, Mike Genest, told a budget forum in Washington last week that back in February he had combed through the U.S. Constitution to research whether California could legally declare bankruptcy -- or revert to some kind of territorial status. (Neither was realistic, he determined.)
California's fiscal implosion may end up being a con law professor's dream. Can a state declare bankruptcy (note: the current bankruptcy code only provides a reorganization option for municipalities, not states)? Can a state revert to a territory? If Californians revolt and install a dictator, would Congress enforce the guarantee clause?
Whatever the answers may be to such heady constitutional questions, the reality is that life in California is going to get a whole lot worse in the very near future.