This story was reported for San Diego News Network on October 8, 2009.
The state government still has its goods on the market and is attempting to make them more appealing. Meanwhile, a local Congressman endorses a gubernatorial candidate and a police chief takes his department in his own hands. Here’s a recap of what’s happening in the world of California’s budget crisis.
Trouble in the world of bonds: California is still seeking individual investors to purchase its long-term bonds after having trouble this week.
According to Bloomberg, the state has “scaled back [its bonds] by about 8 percent to $4.125 billion” with the hopes that investors may become interested.
Despite California’s bonds possibly being more attractive to investors, who could see a profit – say, in 30 years – the likelihood that California could see another budget gap this fiscal year is high, according to the report.
A credit-rating specialist offers his thoughts to Bloomberg:
While the state’s default risk may be negligible compared with company bonds, California’s fight to match its expenses and revenue each fiscal year raises the prospect of negative headlines and possible credit-rating cuts, said Gary Pollack of Deutsche Bank AG’s Private Wealth Management unit.
“It’s justified for Cal to be paying a little higher price in order to sell its debt, given its credit issues,” said Pollack, who’s based in New York and helps oversee about $12 billion as head of fixed-income trading. “Their budget was not as tight and strong as I think a lot of people would have liked it to be.”
Since February, California lawmakers and Governor Arnold Schwarzenegger have faced cumulative budget deficits of $60 billion. The state was so short on cash it paid some of its bills with IOUs from June through September as it confronted the protracted economic slump.
Although California’s bond ratings have seen a drop in the past years, after the passage of a balanced budget agreement in July – the state did see a boost in investment grades by Moody’s Investor Service and Fitch Ratings, which can come off as a bright spot still for Californians.
Filner backs Newsom: Rep. Bob Filner (D-Calif.) has endorsed San Francisco Mayor Gavin Newsom for the executive seat in California.
Newsom — who has been campaigning hard for the governor’s seat despite the election being more than a year away – saw the endorsement by San Diego’s Congressional leader Wednesday.
“I am proud and honored to have Bob Filner’s support,” Newsom said. “He is tireless in his efforts to help improve the lives of those who have served their country. We truly share a passion to end homelessness, and Bob’s work to provide opportunity for all Californians is inspiring.”
Filner said Newsom’s values aligned with that of his own.
“Gavin shares my dedication to working to protect those most in need, including veterans and the homeless,” said Filner. “He is an innovative problem solver with a record of reform and accomplishment. We need that kind of governor in Sacramento if we’re going to move California in a new direction.”
Newsom — a popular mayor and most known for his support of same-sex marriage and San Francisco’s universal health care program — currently has one challenger in the Democratic Party: former governor and current attorney general Jerry Brown.
Fund raisers for California: A police chief recently held a fundraiser after his department took a hard hit from cuts.
Antioch Police Chief Jim Hyde recently raised more than $35,000 for his department’s program Police Activities League, according to Antioch Grove.
“The massive amount of funding raised is justifiable evidence that communities coming together for a common purpose are very powerful,” states the Grove reporter.
In recent weeks, SDNN reported about the idea of selling Krispy Kreme doughnuts to save California too. Check out the pitch.
Hoa Quach is the SDNN political editor for the San Diego News Network.