NightBlogger

JENNIFER STEINHAUER
Facing Deficits, States Get Out Sharper Knives
Some governors, including Arnold Schwarzenegger in California and David A. Paterson in New York, have called special legislative sessions to deal with the crisis. Others are demanding hiring freezes and across-the-board cuts. A few states are finding their unemployment insurance funds running dry, just as the ranks of out-of-work residents spike. In Michigan, to reduce overtime costs, fewer streets will be salted this winter. In Ohio, where the unemployment rate is above 7 percent, the state may need a federal loan for the first time in 26 years to cover unemployment costs. In Nevada, which is almost totally dependent on sales taxes and gambling revenues, a health administrator said the state may be unable to pay claims in a few months. In Oregon, moreover, Gov. Ted Kulongoski, a Democrat, has proposed a $1 billion economic stimulus plan centered on infrastructure improvements, which he envisions would be paid for by raising the state’s gas tax by 2 cents per gallon and increasing a host of vehicle fees. More

This from Bloomberg:

“As many as 27 states face deficits totaling $26 billion, according to a letter distributed to Congress last month by the National Governors Association. ‘The numbers are astounding in terms of lost revenue,’ says Leonard Santow, a former Federal Reserve economist who is now a managing director at Griggs & Santow in New York.”

ABC News
‘America’s Sheriff’ Faces Calif. Corruption Trial
[Orange County Sheriff Michael] Carona…goes on trial Wednesday in a federal public corruption case charging him with conspiracy, mail fraud and witness tampering. Carona, 53, has vigorously denied the charges. In court papers, the government accuses Carona, who has since stepped down, and his friends of accepting nearly $700,000 in cash, gifts, kickbacks and questionable loans in exchange for political favors beginning in 1998. More

Lisa Ling
KCET
Posted: September 23, 2008
For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.

SoCal Connected tracked down some surreal sights associated with the crisis - a company that specializes in removing whatever people leave behind in their foreclosed homes. The process is called a “trashout” - a term the company came up with because it perfectly describes what happens. Everything that’s left is dumped in a trailer and taken to the landfill. Then there’s the guy who started a business to spray-paint dead lawns. That’s right. He paints brown lawns green. We also tag along with a couple of code enforcement officers who are spending more and more of their time having to drain slimy, abandoned pools.

Finally, we meet a typical couple who bought their first home, thinking it was a great investment and tax write-off. Now the place is worth only half of what they paid for it and their neighborhood has almost as many vacant homes as occupied ones. One of the code enforcement guys sums up the problem in a single sentence - “You know you’re in trouble when the lawns are brown and the pools are green!” More

New York Times
California and other states scrambled on Tuesday to cope with bills coming due as they pressed Washington for assistance because the municipal bond markets remain largely closed to them. In Washington, White House officials said they were talking with state officials and reviewing the issue of aid. But despite the urgency of the problem, thorny legal issues have emerged. Though the federal government has taken extraordinary steps to lend money to corporations in the short-term markets, and to provide more money to banks, officials have been stymied over how to assist local governments because of their status as issuers of tax-exempt bonds. More

LA Times — California Gov. Arnold Schwarzenegger, alarmed by the ongoing national financial crisis, warned Treasury Secretary Henry M. Paulson on Thursday that the state might need an emergency loan of as much as $7 billion from the federal government within weeks. The warning comes as California is close to running out of cash to fund day-to-day government operations and is unable to access routine short-term loans that it typically relies on to remain solvent. The state of California is the biggest of several governments nationwide that are being locked out of the bond market by the global credit crunch.

If the state is unable to access the cash, administration officials say, payments to schools and other government entities could quickly be suspended and state employees could be laid off. Plans by several state and local governments to borrow in recent days have been upended by the credit freeze. New Mexico was forced to put off a $500-million bond sale, Massachusetts had to pull the plug halfway into a $400-million offering, and Maine is considering canceling road projects that were to be funded with bonds. More

Banks in Colorado, Maryland, Georgia and California top privately-prepared lists of troubled banks being circulated on Wall Street and in Washington. While the Federal Deposit Insurance Corporation (FDIC) is keeping secret its official list of 90 troubled banks, ABC News has obtained other lists prepared by several research groups and financial analysts. The lists use versions of the so-called “Texas ratio” which compare a bank’s assets and reserves to its non-performing loans, based on financial data made public by the FDIC in March.

Analysts say banks with a ratio over 100 per cent would be the most likely to fail, based on what happened to Texas savings and loans during the 1980’s. “That a fair measure,” said Hal Scott, a Harvard law school professor specializing in banking law. “It doesn’t mean every one of those banks is going to become insolvent, but if you have more bad loans than assets, it’s not a bad way to judge what could happen,” Scott told ABC News. More

SACRAMENTO - Gov. Arnold Schwarzenegger on Wednesday proclaimed a statewide drought after two years of below-average rainfall and other factors.

“For the areas in Northern California that supply most of our water, this March, April and May have been the driest ever in our recorded history,” Schwarzenegger stated in his executive order. “As a result, some local governments are rationing water, developments can’t proceed and agricultural fields are sitting idle. We must recognize the severity of the crisis we face.” More

tracypress.com
A dead crow found in Tracy was confirmed infected with West Nile Virus, the first sign of the pathogen in the Central Valley this year, the San Joaquin County Mosquito and Vector Control District found late Wednesday. Like most birds, crows live only five days after getting infected, she said. Bearden said vector control scientists find the virus a week earlier every year. Since the virus is heat-activated, she added, a few consecutive days of 100-degree weather in early

A dozen California counties have reported infected or dead animals because of the virus this year. The first recorded human case of the virus now endemic to the county was in summer 2004, when a man died from the avian infection. Two Central Valley residents, a horse and 158 birds have since died from it. Forty-one of those birds died in Tracy. More

AP/TERENCE CHEA
Time
The city of Vallejo filed for bankruptcy protection Friday to deal with a ballooning budget deficit caused by soaring employee costs and declining tax revenue. The San Francisco Bay area suburb of about 120,000 residents became the largest California city to seek bankruptcy protection.

Mayor Osby Davis said the city’s attorneys filed papers seeking Chapter 9 bankruptcy protection in federal court in Sacramento. “We’ve exhausted all avenues at this point, and this is all we had left,” Davis said. “I had hoped to avoid it all the way up until yesterday. It’s something we can’t avoid … We can’t pay our bills.” Read more

Photo kiwanja
ALICIA CHANG/Ap
Last month, the USGS reported that the Golden State has a 46 percent chance of a 7.5 or larger quake in the next 30 years, and that such a quake probably would hit Southern California. The Northridge quake, which killed 72 people and caused $25 billion in damage, was much smaller at magnitude 6.7.

The scenario is focused on the San Andreas Fault, the 800-mile boundary where the Pacific and North American plates grind against each other. The fault is the source of some of the largest earthquakes in state history, including the monstrous magnitude-7.8 quake that reduced San Francisco to ashes and killed 3,000 people in 1906. Read more

Photo d70focus

Press TV
High house prices in one of the wealthiest US cities have forced increasing numbers of women and elderly people to sleep in their cars. According to organizers of a program that makes it possible for the homeless to sleep safely in their cars at night, more people are living in their cars in the city of Santa Barbara, while many of them even hold part time jobs.

The organizers believe the high house prices, which average at around $1 million, are driving many people to bed down for the night in their vehicles in the exclusive coastal city. New Beginnings is the organizer of the program. It runs 15 car parks that open from 7pm to 7am in the rich city allowing the homeless to park at night.

New Beginnings Coordinator Nancy Kapp said the demand for the program was growing due to the economic recession. “The way the economy is going, it’s just amazing the people that are becoming homeless. It’s hit the middle class,” she said. Meanwhile, New Beginnings Executive Director Gary Linker also said that one third of the people who use the program have part-time jobs.

Dani Carlson and Kyra Jenkins
kmph.com
en California counties have confirmed cases of birds infected with the West Nile Virus. One of those is right here in the Central Valley. That was news to Jose Bettencourt. He and his family found out Wednesday that the West Nile Virus might be in their Southwest Visalia neighborhood. “It’s kind of a scary thing if it’s happening here in this area,” said Bettencourt.

A state lab confirmed Tuesday that a dead crow, found on Chinowith Street, was infected with the deadly virus. According to Delta Vector Control District officials, this is one of the earliest times the virus has ever been found in Visalia. “That means there is active virus transmission in the area,” said Yolanda Laurence, the Assistant Manager for Delta Vector. “If we have infected birds then we probably have infected mosquitoes.” Read more