Magazine September 20, 2010, Issue

Crisis Made Locally

A homeless man takes shelter under a freeway in San Francisco, Calif., January 6, 2016. (Beck Diefenbach/Reuters)
California is a penniless state full of penniless cities

California famously competes with Illinois for the title of the most fiscally dysfunctional state. While residents of most states are enduring only their second or third year of fiscal crisis, Californians have been suffering since for more than a  decade — they recalled Gray Davis in part because of their dissatisfaction with his fiscal management, and matters haven’t gotten any better under Arnold Schwarzenegger. This year, the state faces one of the country’s biggest budget deficits: $19 billion, more than a fifth of its total budget.

Less noted is that California’s municipal finances are among the bleakest in the country, too.

Josh Barro — Mr. Barro is the Walter B. Wriston fellow at the Manhattan Institute. His research is focused on state and local fiscal policy.

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