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bridges vol. 22, July 2009 / Letter from the Editor By Caroline Adenberger Dear Reader, What has happened to California Dreamin'? It seems to have turned into quite a financial nightmare. Two weeks ago, the once so golden state began issuing IOUs to its creditors because of California's current inability to meet its financial obligations with cash. Amongst the creditors are businesses, health clinics, college students, and taxpayers who are owed money by the state. California's financial situation is indeed severe; only twice before in the state's history IOUs had to be issued because of a shortage of cash flow. The first time was during the Great Depression and the second time was in 1992, when IOUs were issued to state workers during a budget crisis. This year, the world's eighth largest economy has to cope with a budget deficit of $26.3 billion (about 1.5 per cent of state gross domestic product), on revenues of just $113 billion. Unfortunately, the urgently needed end is not yet in sight for the political stalemate between California's democratic and republican lawmakers who are infamous for their confrontational culture and hardliner positions of extreme left-wing and right-wing politics. California state law requires a balanced budget that must be passed by a two-thirds majority. In the California State Capitol, Republicans currently hold just over one third of the seats. And, while lawmakers continue their fight in Sacramento over tax increases versus spending cuts to balance the budget, institutions like the University of California (UC) have to figure out how to deal with the major financial constraints they are facing. UC is one of the largest public universities in the US, with about 170,000 employees on ten different campuses. It has proposed salary cuts and furloughs for all faculty and staff members to help reduce a projected $800 million cut from the $3.2 billion in state funds over the next two years. The reductions would apply to all employees, no matter if their salaries are coming from state funds or other sources such as grants from federal funding agencies like NSF or NIH. Access to the full article is free, but requires you to register. Registration is simple and quick – all we need is your name and a valid e-mail address. We appreciate your interest in bridges. |
