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Text size [+][-]  Saturday November 21 2009GLOBAL EDITION

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19 May 2009 09:28

Squeezing Sacramento

By Jeff Segal

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On May 19, California will hold a special election to vote on six budget reform measures. All six measures currently look likely to fail, according to the latest polls by the Public Policy Institute of California.

On May 13, California treasurer Bill Lockyer formally requested that the federal government backstop the sale of short-term municipal bonds that the state plans to issue this summer.

 
The state is about to vote on proposals to curb its $42bn deficit. All look set to fail. Now it needs the federal government to backstop its borrowing. That gives the feds leverage. As with GM, they should demand California make crucial changes before it gets any support.

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