8 months ago
SACRAMENTO, CA - California's recurring budget crisis is "an embarrassment," said Sacramento State Business School Dean Sanjay Varshney, and he faulted lawmakers and the governor for not reaching a compromise to close a $24 billion shortfall.
Varshney said, "It is unlikely that the deficit can be solved through higher taxes in an economic downtown in a state with one of the highest unemployment and foreclosure rates, and a regulatory environment unfriendly to business." So the dean said spending will have to be cut.
Varshney said the worst case scenario for California would be $24 billion in program and service cuts. He said such cuts could bring the state to near-bankruptcy, but added California would never go insolvent.
Varshney told viewers the federal government would intervene with a bailout before the state goes belly-up.
The business school dean also said the Sacramento region will see another wave of foreclosures in 2010, with homeowners who took out adjustable rate mortgages facing their latest interest rate hike.
He also projected a 2 to 3 percentage increase in the area's unemployment rate, before the jobless rate settles down.
You can view the entire interview with News10's Sharon Ito in the Live_Online Archive.
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