No Money, More Problems

"There's no money." That's what millions of Californians are waking up to today. The eighth largest economy in the world is now broke. And if that doesn't worry you, even just a little, I'm not sure what will.

"People are going to be hurt starting today," said Hallye Jordan, speaking on behalf of the state Controller. "There's no money."

Since state legislators failed to meet an end of January deadline on an agreement to make up for California's $40 billion budget gap, residents won't be getting their state tax rebates, scholarships to Cal Grant college will go unpaid, vendors invoices will remain uncollected and county social services will cease.

Californians who paid too much in income taxes last year won't be getting refunds. Some students who rely on their Cal Grants to pay for college may have to decide to postpone their education until the economy improves and they can afford to pay for it. Vendors will go unpaid, lowering their revenue, possibly forcing more people out of work as revenue might not be enough to take care of overhead and make payroll.

But in a state of over 38 million people, where the unemployment rate currently hovers near 10%, perhaps the largest casualty is the social services. At a time when people need social services the most, the state of California won't be able to guarantee them.

Meanwhile, the demand for assistance has risen. The number of Californians receiving food stamp benefits increased by 13.8% for the year ending September 2008, while the number of families receiving cash assistance from the CalWORKs welfare program rose by 5.9%, according to the California Budget Project.

And while some of California's problems are unique to that state, that the largest state in the union by population, is on life support and fading is cause for concern for all of us.