Will teachers and other staff in California’s public schools get the paychecks they are due, and if so, will they be paid on time?
The answers to those questions are unclear. California – whose budget is $19 billion in the red – is having to put off nearly $2.5 billion in payments each month that it owes to school districts around the state. It simply does not have the money to pay the districts and also meet its debt and pension obligations. IOUs appear to be in the very near future for California. The deferred payments to schools were not supposed to come until October, but California had to move that up to September because of the state’s horrible financial condition.
“School districts still have to meet payroll,” the head of the Association of California School Administrators lamented in an Associated Press article.
But how they will meet payroll is now anybody’s guess.
The sad thing is, California – like our federal government – has brought its problems on itself. With its wealth in every sector of the economy from agriculture to entertainment, California could be doing well financially if it had exercised even moderate spending restraint. But instead, California lawmakers have spent wildly on, among other things, environmental fads that drove the automobile industry and many jobs out of the state. It also has imposed back-breaking taxes that discouraged business investment and expansion.
Now, it is reaping the consequences of those policies.
Can our federal government – and by extension the American people – hope to escape a similar fate if it does not stop behaving in the same reckless manner as California?