Is California going bankrupt?
California’s fiscal controller, John Chiang, has called the state’s spending plan “massively unbalanced,” adding that the Golden State is suffering from a cash shortfall not seen since the Great Depression.
Despite the deepening budget crisis, the California Legislature on Wednesday failed to pass a proposed $11 billion in cuts.
The current problems are linked to a combination of a steep decline in revenue from income taxes, sagging retail activity and the drawn-out downturn in housing. The unemployment rate soared to 11.5% in May, a jump from 6.8% a year earlier.
State authorities are planning drastic cuts on healthcare and education. Among other plans is the closure of 80% of the state’s parks, which will not only endanger the environment but also cost thousands of people their jobs.