Cahn Chapter 5
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critical to the nation's military; its lead in aerospace and high technology has positioned the state for continued growth throughout the twenty-first century; Ex. computers, film and animation, multimedia, biotechnology, semiconductor, and aerospace industries, incubating new __________ __________ in the apparel and furniture-making industries
film, music, and television; have served to export a cultural self-image that, while somewhat artificial, has served to foster the evolution of popular culture throughout the nation
accounts for approximately one-third of the state's workforce; The rapid growth of this sector, with its low to moderate wage scale, has raised some concerns about how the economy will make the adjustment from one dominated by a shrinking manufacturing sector, which traditionally employed moderate- to high-wage workers
jolted California's economy beyond base closings; The reduction in federal defense contracts mean heavy losses in aerospace and high-tech civilian jobs.
The recession, federal budget cuts, and natural disasters exacerbated an ongoing fiscal crisis in California. Both parties used the fiscal crisis as a vehicle to push their favored __________. Democrats, who at the time controlled both the senate and the assembly, pushed for a tax increase to protect the state's social safety net. Governor Wilson and his Republican colleagues in the legislature sought deep spending cuts. The deadlock persisted for 63 days, as the state limped along with a budget. Ultimately, a $57.4 billion budget passed.
Democratic and Republican agendas
The cumulative impacts of the recession and budget crisis of the 1990s were most visible at the county level. The _____ ________ ___ ____ _______ restricted the ability of the counties to raise new revenues to meet the growing demands for services by their own residents, as well as the services required by the state. For more than a decade after Proposition 13 went into effect in 1978, the counties managed to avoid the full impact of its taxing and spending limitations. The same year, a sympathetic legislature in Sacramento provided relief in the form of AB 8, a comprehensive finance law that stabilized funding to school districts, cities, counties, and special districts in the wake of Proposition 13.
Tax Revolt of the 1970s
reduced property tax revenues by as much as 60 percent, several California counties were in financial distress by the early 1990s. Rural counties were hurt the most because of their dependence on property taxes and the lack of alternative revenue sources. Butte County avoided becoming the first county in the nation to file for bankruptcy, thanks to three consecutive state bailouts. _____________ _____ restricted the discretionary power of elected leaders to such an extent that they were unable to cope with the fiscal crisis effectively (voters had declining confidence in government).
one place most insulated from these financial pressures; known as the home of Disneyland, aerospace and high-tech industries, good school districts, and a stronghold of conservative politics. Just days after the 1994 election ushered a Republican congress on a platform of fiscal restraint, the county reluctantly announced that it had lost more than $1.6 billion in risky investments. When its lender banks began to seize ___________ ___________ securities as collateral, the county filed for Chapter 9 ______________. Treasurer Bob Citron borrowed twice as much money as he had on deposit, nearly tripling the size of the county's investment pool, to purchase high-risk, high-yield securities. The factors that made the fiscal crisis possible: political fragmentation, voter distrust, and state austerity. ____________ lasted 18 months, but its effects will be felt for a long time to come.
Orange Country bankruptcy
High-tech industries powered an economic turnaround in the late 1990s, and for a while, deficits became a thing of the past. Governor ________ began his term in 1999 with proposals to invest the state's new wealth in education and infrastructure projects. However, the collapse of technology stocks, an energy crisis, and a nationwide post 9/11 recession brought these lofty visions back down to earth. By 2003, the state faced a record deficit, and ______ was recalled by the voters that October.
recall of Gray Davis
arrived in Sacramento, promising to be consensus builder; In his first months in office, he was praised by members of both parties for his ability to make deals with leaders of interest groups and Democratic leaders to pass legislation. Many such accords were brokered personally in his personal smoking tent on the capitol lawn. His first test came midway through 2004, when he failed to meet his promise to deliver the state budget on time. As the July 1 deadline approached, there appeared to be agreement on the $103 billion budget, until Republicans in the legislature made their votes unconditional upon _____________'s support for a proposed bill making it harder for workers to sue their employers and another one opening the way for public schools to contract for school bus drivers and cafeteria workers. He campaigned for bills around the state and appropriated move and television cliches, calling leaders of the legislature "girlie men" and threatening to "terminate" them. The tough talk did nothing to prevent a new generation of long, hot summers in Sacramento. The stalemates continued, and in 2008 Governor _____________ approved a state budget that was a record 85 days overdue.
Schwarzenegger approved a state budget that was a record 85 days overdue.
overdue state budget
Californians lived for many years under the _____ that the state's economy was _________-__________. It must have appeared to many people that the economic infrastructure laid down after World War II, with its unrealistic reliance on federal dollars and the defense establishment, would continue forever. That perception changed with the crisis of the early 1990s. The recession was costly in terms of ruptured human lives, jobs, and prestige.
the "recession-proof" myth
The counties continue to cope with the ______ _________ of reduced revenues and a high demand for services. And, as county governments are forced to make hard choices, it is often those constituencies who are least able to fight for their fair share who are most severely affected.
twin budget pressures
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