California is Broke!!

FROM CNN’s Jack Cafferty:

California has some serious money troubles.

Voters have rejected five out of six propositions that were meant to pull the state out of a deepening budget crisis. The measures were a combination of spending reforms, higher taxes, and changes in borrowing and funding. The only proposal that passed would prohibit pay raises for lawmakers during deficit years.

With the failure of these proposals, it’s now estimated California’s budget deficit could balloon from about $15 billion to more than $21 billion.

Governor Arnold Schwarzenegger had said if these measures failed, he’d have to make drastic cuts… This could include shortening the school year by a week and a half, cutting tens of thousands of education jobs, eliminating health insurance for 250,000 needy children, laying off 1,700 firefighters, withholding $2 billion from local governments — which could mean cuts in police forces and other services — and freeing almost 40,000 inmates from San Quentin prison.

The results of yesterday’s special election mark a new low for the Republican Schwarzenegger, who had promised to restore fiscal stability to the state.

Meanwhile the three major credit rating companies reduced the grade on around $60 billion of California’s bonds to the lowest rating of any U.S. state. There’s no question the recession and record budget deficits are causing critical damage to California’s economy — which would be the world’s eighth largest if it were a separate country.