LOS ANGELES (5/22/09)--With the state having more than a $21 billion budget deficit hole to fill, about 60% of Californians who voted Tuesday opted to reject five ballot measures designed to keep the state solvent through 2009.
The measures would have prolonged tax increases, capped state spending, earmarked money for education and involved the state in a borrowing plan against its lottery.
The failure of the measures, declining revenues since the state passed its budget, and significant home foreclosure rates and high unemployment have created severe financial problems in the state (The New York Times May 20).
What do these developments mean for the state's credit unions?
"California faces a new, harsh fiscal reality after Tuesday's election," Melissa Ameluxen, director of state government affairs for the California Credit Union league, told News Now.
"The state's legislative leaders now have to close an estimated $15.4 billion to $21.3 billion budget gap. It's no secret that deep cuts are likely in the works. We also are facing the overall downturn in the economy, repercussions from slashed services, job loss and hiring freezes, all of which have an impact on our state's credit union members," she said.
"However, California credit unions have a strong record of helping public employees," she added.
"As we approach the rarely met constitutional deadline to pass a state budget, the state stops payment to a select group of state employees and state contractors. As a service to those members, many credit unions provide bridge loans to replace the paychecks the state has temporarily cut. During this turbulent time, California credit unions stand ready to help our members with sound financial services."
courtesy of cuna.org