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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (12980)	8/22/2003 5:23:31 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 306849

Debt level equal to a full year of revenue. Can we cut the budget to ZERO for next year? That would cover it. Its all about cutting waste, really. Treasurer calls massive bond sale 'formidable task' California is preparing to take an unprecedented $18 billion in bonds to the market over the next eight months, bringing the state's total debt level to $65 billion. Angelides, however, said Friday that selling the bonds to cover part of the this year's budget hole will pose serious challenges for the state. "Borrowing this amount of money in the public markets, given the political turmoil here in California, will be a formidable task," he said. "In the investment community's mind, they see this budget as a reflection of a political world that is unable to come to grips with basic financial decisions." The state also faces legal challenges to its borrowing plan. An anti-taxation group has sued to stop California from borrowing money to cover its pension obligations. The Howard Jarvis Taxpayers Association says that because the bond sale could require higher taxes to pay off the debt in the future, it needs voter approval under the state's constitution. A court date has been set for Sept. 17. Depending on the outcome, the state may not be able to sell the bonds in time to make its Oct. 1 $550 million payment to the California Public Employees Retirement System, the nation's largest pension fund. And the Pacific Legal Foundation has threatened to sue over the $11 billion in bonds to cover the state's deficit, which the group also claims needs voter approval. The bonds would be repaid by dedicating a half cent for every dollar the state gets in sales taxes. sfgate.com