The State of the States: 46 US States Could File Bankruptcy in 2009 – 2010

States are facing a great fiscal crisis. At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.

States are currently at the mid-point of fiscal year 2009 — which started July 1 in most states — and are in the process of preparing their budgets for the next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps of $46 billion (over 9% of state budgets) have opened up in the budgets of at least 42 states plus the District of Columbia. These budget gaps are in addition to the $48 billion shortfalls that these and other states faced as they adopted their budgets for the current fiscal year, bringing total gaps for the year to over 14 percent of budgets.

The states’ fiscal problems are continuing into the next two years. At least 41 states have looked ahead and anticipate deficits for fiscal year 2010 and beyond. These gaps total almost $88 billion — 16 percent of budgets — for the 34 states that have estimated the size of these gaps and are likely to grow as gaps are re-estimated in the next few months.

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Schwarzenegger Signs Order Cutting Jobs

FDIC takes over 2 more banks, closing 28 branches

The 28 branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California, were closed Friday by federal regulators.

The banks, owned by Scottsdale, Ariz.-based First National Bank Holding Co., were scheduled to reopen on Monday as Mutual of Omaha Bank branches, the Federal Deposit Insurance Corp. said.

The FDIC said the takeover of the failed banks was the least costly resolution and all depositors — including those with funds in excess of FDIC insurance limits — will switch to Mutual of Omaha with “the full amount of their deposits.”

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5.4 earthquake rocks Illinois; felt 350 miles away

A 5.4 earthquake that appeared to rival the strongest recorded in the region rocked people awake up to 350 miles away early Friday, surprising residents unaccustomed to such a powerful Midwest temblor.

The quake just before 4:37 a.m. was centered 6 miles from West Salem, Ill., and 66 miles from Evansville, Ind. It was felt in such distant cities as Chicago, Cincinnati and Milwaukee, 350 miles north of the epicenter, but there were no early reports of injuries or significant damage.

“It shook our house where it woke me up,” said David Behm of Philo, 10 miles south of Champaign. “Windows were rattling, and you could hear it. The house was shaking inches. For people in central Illinois, this is a big deal. It’s not like California.”

The quake shook skyscrapers in Chicago’s Loop, 240 miles north of the epicenter, and in downtown Indianapolis, about 160 miles northeast of it. Residents of Cincinnati and St. Louis also reported feeling the earth shake.

Irvetta McMurtry of Cincinnati said she felt the rattling for up to 20 seconds.

“All of a sudden, I was awakened by this rumbling shaking,” said McMurtry, 43. “My bed is an older wood frame bed, so the bed started to creak and shake, and it was almost like somebody was taking my mattress and moving it back and forth.”

Lucas Griswold, a dispatcher in West Salem, said the Edwards County sheriff’s department received reports of minor damage and no injuries.

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Villaraigosa warns ICE to back off immigration raids

Mayor Antonio Villaraigosa is asking federal officials to rethink their policy on workplace immigration crackdowns that involve established businesses and to focus on employers that mistreat workers instead.

The mayor said in a letter to Homeland Security Secretary Michael Chertoff that work-site raids by Immigration and Customs Enforcement could have “severe and long-lasting effects” on the local economy, the Los Angeles Times reported Thursday.

ICE made more than 4,900 work-site arrests nationwide in fiscal 2007, a 45-fold increase over the number in 2001, authorities said.

More than 130 undocumented workers were arrested at a San Fernando Valley manufacturing company in February and over 60 workers were arrested for immigration violations at South Bay-area warehouses last week.

Los Angeles companies such as clothing manufacturer American Apparel Inc. have reported being questioned by ICE officials about their hiring procedures.

Villaraigosa accused federal officials of targeting “established, responsible employers” in industries that rely on “workforces that include undocumented immigrants.”

“In these industries, including most areas of manufacturing, even the most scrupulous and responsible employers have no choice but to rely on workers whose documentation, while facially valid, may raise questions about their lawful presence,” he wrote in the March 27 letter.

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Mayor Villaraigosa: Our City Must Eliminate 767 Positions

Los Angeles must eliminate 767 city jobs by June 30 to reduce a projected multimillion-dollar budget deficit, Mayor Antonio Villaraigosa said Friday.

Unless something is done, the city is expected to spend $406 million more than it takes in during fiscal year 2008-09, which starts July 1, due to a downturn in sales tax receipts, taxes from the sale of residential and commercial properties, and state reimbursements.

When the mayor presents his budget on April 21, city officials will have identified 767 positions that can be eliminated, which will eventually start the city’s complicated system of laying off employees.

It is not clear how many employees will actually be fired. Los Angeles employees have not experienced layoffs since 1983 when about a dozen workers were let go.

“The budget that I will present to the City Council next week will include some deep and painful cuts. There will be difficult choices to make but we will preserve our core city services,” Villaraigosa said at a Friday afternoon news conference.

Police officers and firefighters will not be laid off, but civilian employees in both departments could be on the chopping block, the mayor said. Employees may also be subject to mandatory unpaid vacations and shortened workweeks.

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Home schooling no more (in California)?

The L.A. Times has this story about a recent ruling by an appellate (state) court in California:

Parents who lack teaching credentials cannot educate their children at home, according to a state appellate court ruling that is sending waves of fear through California’s home schooling families.

Advocates for the families vowed to appeal the decision to the state Supreme Court. Enforcement until then appears unlikely, but if the ruling stands, home-schooling supporters say California will have the most regressive law in the nation. . . .

“Parents do not have a constitutional right to home school their children,” wrote Justice H. Walter Croskey in a Feb. 28 opinion signed by the two other members of the district court. “Parents who fail to [comply with school enrollment laws] may be subject to a criminal complaint against them, found guilty of an infraction, and subject to imposition of fines or an order to complete a parent education and counseling program.”

Phillip Long said he believes the ruling stems from hostility against Christians and vowed to appeal to the state Supreme Court. . . .

Thoughts?  Predictions? 

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Southern California’s Tent City

Mexican Political Influence Expanding

mexican_influence.jpg“We are powerful enough to make a
difference,” says Guadalupe Gomez,
talking about the influence migrants
have in Mexican politics.

Originally from the Mexican state of Zacatecas, he’s lived north, in the US, for more than 40 years. He is currently president of the Federation of Zacatecan Associations.

The migrants’ influence comes with the massive amounts of money they send back home.

Despite the relative stagnation of the US economy, this flow of money keeps growing, according to recent data. In 2003 it increased by 35% – the total amount sent that year to Mexico was more than $13bn.

Remittances from Mexicans in the US have become one of Mexico’s most important sources of income – second only to oil and surpassing the traditional tourism industry.

According to Roberto Suro, director of the Pew Hispanic Center in Washington “remittances have probably benefited Mexico more than Nafta” (the North American Free Trade Agreement between Canada, the US and Mexico).

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Jewish Vote Eclipsed By Hispanics


A California Jewish newspaper dubbed it the “Jewish primary,” but the Super Tuesday contest in California might be more accurately called the Hispanic primary. And California wasn’t alone — in a number of states, a surging Hispanic population is poised to play an unprecedented role in the 2008 presidential election and beyond.

Jewish leaders have been slow to recognize a seismic shift in the political landscape that also includes a black electorate galvanized by the Barack Obama phenomenon and a growing Asian community, some activists say — although political strategists in both parties are already factoring it into their planning.

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