'Groundhog Day'

" missing government from all across this country are facing financial disasters. Budget shortfalls putting governors and a very tight spot right now they're forced to make sweeping cuts. It their budgets in a desperate attempt to close the billion dollar gaps they've got. So right now California is at the the hardest they're predicting -- 230. Billion dollar budget deficit by the end of 31. California Kentucky Nevada new York and Washington air base in the largest deficits for states in modern history. California -- is really going to be hit the hardest a whopping 26 billion dollar budget gap. Bush in the state to slash about fifteen billion dollars basic services. Only North Dakota and Montana good for you are in the black for -- 30 budgets Steve Moore is senior economics writer for The Wall Street Journal. Also co author of the end of prosperity Steve good to have -- here. I'm not that is interesting stat that one in five Americans -- either California or Texas that this is reality for a lot of folks in particular. In California but that it amazes me is when you look at California's situation. People there are people at California pay a lot more in taxes than anybody else in this country the average person pays 4000 dollars roughly -- is that eleven California. You're gonna pay 4500. Dollars in taxes and and look what you've got. In the worst of -- they're paying more getting last and that state is basically on attitude."

" In -- Arnold Schwarzenegger the governor there must feel like he's a character that movie Groundhog Day remember went. Bill Murray replaying the sand hill over and over again. I mean this has been six years now we're every a year or eighteen months California finds itself in another 1020 billion dollar deficit they try to plug the holes and then they get another leak in their budget. They just came out of a thirty billion dollar budget situation last year where they had to plug the leaks and here they are again with huge deficits and -- you just really. Put your finger on the problem when to -- about the states that have these big problems California obviously being odd number one. But you know as a New Yorker New York State and New York City have big. Problems with their budgets at delta the highest tax areas in the country California New York have the highest sales tax income tax and business taxes and the country and they have not been able. To -- balance their budgets power because Martha what's happening is a lot of those businesses are leaving those high tax -- for places like access."

" And you say you can't help you look at what around Schwarzenegger has done the governor he tried to go live highlighting get rid of some of the -- in the budget. I was fascinated by and it -- that they tried to save about fifteen million dollar I think it was it it. Medicare Medicaid and you know -- when they cut is that the budget and he went through lots of different things they could cut out. Momentarily but it's written into those bells that those things as -- restore the next year so you if you wanted to governor is has luck. The spending have to stop its next to impossible to actually do that at."

" This is a really important point mark them because. Remember what happened last year we gave. Somewhere in the neighbor of I eighty to a hundred billion dollars of federal money to the states through the stimulus plan. This was supposed to help. Balance the state budgets we spent all about money and now guess what the states are broken yet and here's the problem that's exactly what you just -- Martha. One of the provisions of the stimulus bill sad if they take this money it has to be spat and they can't cut any of the programs in those areas so you're done about higher education K through -- you're talking about nearly two thirds of the state budgets that they cannot cut so my feeling of Martha that this stimulus money has actually made the state -- it. --"

" Yes it adds what is it was fifteen million in savings from new anti fraud measures that that they want to basically put in a -- state of California there avid and have a mechanism. To actually get rid of fried it it boggles the mind Steve thank you very that's for help sort out some of -- plans to see an artist Georgia pat on the right."