Infrastructure funding in California is grinding to a halt as two crises hit simultaneously: a political impasse unable to resolve a budget gap of $42 billion and a credit crisis leaving the state unable to sell its bonds.
"Road, levee, school and housing construction projects throughout California are on the verge of being halted or delayed, as state officials prepare to shut off their financing in the most drastic fallout yet from California's cash crisis.
All rely on funds that are nearly depleted because the state has been unable to sell the routine bonds it uses to keep cash flowing. Last month, the state failed to sell two-thirds of bonds worth $500 million, according to state Treasurer Bill Lockyer.
Stopping public-works spending also would move California away from what many economists and President-elect Barack Obama are recommending to address the country's deepening recession.
The political impasse over how to resolve a budget gap estimated to reach $41.8 billion by mid-2010 continued in the Capitol on Tuesday (12/17), as the latest budget plan put forth by Democrats was defeated in the Assembly. The vote fell along party lines, 48 to 27, short of the two-thirds vote needed to pass fiscal measures."
Thanks to Gladwyn d'Souza?
FULL STORY: California road, school construction projects could be halted or delayed
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