Compromise Offered in California

Finestone, Deborah
June 2003
Bond Buyer;6/18/2003, Vol. 344 Issue 31659, p1
Trade Publication
Two moderate legislators in the United States have proposed a compromise plan that seeks to break the partisan stalemate over how to resolve a 38 billion dollar shortfall in California's budget as of June 2003. The plan includes about 5.4 billion dollars in spending cuts in fiscal 2004, as well as an increase in the state's sales tax, to pay for ten billion dollars in bonds to help finance the huge deficit. Majority Democrats have opposed making more severe reductions to programs and Republicans have refused to consider tax increases. Meanwhile, investment bankers and analysts have warned that California needs to raise revenues and balance its budget soon if it hopes to continue borrowing money in the credit markets.


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