The latest blow came with the second downgrading in four weeks by Standard & Poor’s of the Golden State’s remaining $8.7 billion of economic recovery bonds, or ERBs. These bonds are backed by sales-tax revenue, which is taking a hit as consumers in California, like the rest of the country, rein in their spending.
California will not have the ability to borrow any more! Even if California is able to borrow, the interest rates will be so high we will have to cut more out of the budget or raise taxes.
The California government needs to pass a budget yesterday!