Thursday, November 17, 2011

Fitch: Effect of California Trigger Cuts to Vary for State & Schools

Nov. 17, 2011, 3:11 p.m. EST
NEW YORK, Nov 17, 2011 (BUSINESS WIRE) -- Underperforming revenues will likely prompt the State of California to lower its near-term revenue outlook and implement some mid-year trigger cuts contained in its 2012 fiscal budget, a scenario that will have disparate implications across some California credits, according to Fitch Ratings.
Trigger cuts would reduce spending not only on certain state operations, but also on transfers for higher education and school districts. The implementation of mid-year cuts will have little effect on the credit of the state or the University of California (UC). However, credit risks are potentially more significant for California-area school districts rated by Fitch.
For the state (GO bonds rated 'A-' by Fitch), the trigger cuts provide a quick corrective response to revenue underperformance and are not expected to affect the state's credit. The state's larger credit challenge remains addressing the reopened budget gap created by revenue underperformance and inability to achieve other budget solutions. UC (rated 'AA+') maintains significant flexibility to absorb the expected trigger cut despite having already absorbed substantial cuts this fiscal year. By contrast, the trigger cuts could affect the credit quality of some school districts, notably those with higher reliance on state funds and already limited financial flexibility. Read more...

Friday, November 4, 2011


 "WE THE PEOPLE” Occupy Wall Street “99ers”Petition California Governor to Declare a “Financial State of Emergency” to Halt Pending Foreclosures, holds banks Accountable, and Stabilize the Budget Crisis 

By: Patrick Porgans and Seth Sandronsky                                                       
             In California, foreclosures continue to batter homeowners, averaging out at 1,866 a day, 77 an hour each day the past 10 months, or 1.3 foreclosures per-minute. That’s surely on the minds of many Occupy Wall Street “99ers.”
According to Shum Preston, spokesman for the California attorney general’s office, there was a recent “surge in foreclosures” between July and August bringing an additional 560,000 homes into the foreclosure process.
Reportedly, “settlement negotiations” between the 50 state attorneys general and the nation’s five largest banks – Bank of America, JPMorgan Chase and Co., Wells Fargo, Citigroup and Ally Financial Inc., commenced in the fall of 2010, around abuses related to mortgage  servicing and foreclosure  practices
            During that time, the 50 state attorneys generals remained “occupied” in foreclosure-related settlement negotiations with the U.S. banks responsible for the housing market meltdown, while reportedly offering pennies on the dollar and requesting immunity from prosecution. 
The surge in California foreclosures, job losses, and the state’s ever-looming budget crisis, prompted “99ers” to  petition California Gov. Jerry Brown, Jr. to declare a Financial State of Emergency (FSE).
This FSE would provide for a moratorium on existing and future foreclosures within the state; call for and support of holding banks involved accountable, and use whatever means necessary to stabilize the state’s economy.
Via this statewide petition, the petitioners can express and peacefully exercise their rights to urge Gov. Brown to stop the flood of Golden State foreclosures (. He has the authority to invoke the letter and spirit of the Victims Bill of Rights California Constitution, Article 1, Section 28 (a), in the interest of foreclosure victims.
Gubernatorial precedent exists.
In January 2011, Gov. Brown declared a financial state of emergency involving California’s budget gap between taxing and spending. The state’s current budget was approved with a number of built-in “trigger mechanism” of spending cuts to take effects if anticipated tax-revenue projections in December fall short of $86.4 billion required for General Fund projects and programs.
Roughly one-third of California homeowners have mortgages that exceed the market price of their properties now. Reportedly, the Golden State has seen one in five foreclosures nationwide, or 1.2 million since 2008. Projections are that statewide foreclosure could reach 2 million next year.
            If California’s foreclosure rate continues unchecked, combined costs to homeowners, the property tax base, and local governments will reach an estimated $650 billion – and possibly as high as $1 trillion – from 2008 through 2012, according to a labor-community  coalition (Alliance of Californians for Community Empowerment, People Improving Communities through Organization, California Reinvestment Coalition and several Service Employees International Union locals).
According to the ACCE, foreclosures will reduce property tax revenue by an estimated $3.8 billion. That amounts to a $2,058 property-tax-loss per foreclosure. The foreclosure-related costs that get kicked back to the government amounts to $17.4 billion, more than $19,000 per foreclosure.
In September 2010, while serving as state attorney general, Gov. Brown directed Ally Financial, Inc., formerly GMAC, to prove immediately that it is complying with state law or, if it cannot, to cease and desist from foreclosing on California homes. Around that time, GMAC halted foreclosures in 23 other states. 
Late last month, California Attorney General Harris announced after much consideration that she was pulling out of ongoing negotiations with the five biggest U.S. banks. She said that the agreement would allow “too few …homeowners to stay in their homes” and shield banks from further investigations.” According to The Wall Street Journal, AG Harris remains open to a “deal” with these U.S. banks in multi-state mortgage negotiations provided it involves a “stronger proposal” from lender.
            “I concluded that this is not the deal California homeowners have been looking for,” Harris wrote in a letter reportedly sent to U.S. Attorney General Thomas Perrelli and Iowa Attorney General Tom Miller.
Why “reportedly?” Well, when a home owning-member of the public asked for a copy of her letter to Perrelli and Miller, Harris’ press officer refused. Further, when pressed for even an outline of the “deal” that Harris claims California homeowners seek, a spokesperson with her office suggested reading and making contact with mainstream news sources!
Harris is the latest state AG to back out of the potential 50-state settlement agreement, which originally promised criminal investigations into mortgage and foreclosure fraud. This agreement has come under fire for potentially granting broad immunity to banks for too little money, and for failing to adequately investigate the lead up to and occurred after the housing crisis.
Supporters of the California foreclosure petition claim that it would be in the state’s and the people’s interest to request that the governor lend his full support and weight to assist AG Harris in her investigation of the banks to gather all of the relevant facts to ascertain if sufficient grounds exist to file formal charges against U. S. banks involved in the foreclosure crisis, and, thereupon to proceed with the appropriate legal action(s).
California petitioners support AG Harris and Gov. Brown’s investigation of banks and foreclosures. Further, petitioners seek a full public disclosure of the details involving all alleged victims and perpetrators.
Sign up now, and for more information, visit,,
Patrick Porgans-Solutionist
Seth Sandronsky lives and writes in Sacramento, CA 



In California, foreclosures continue to batter homeowners, averaging out at 1,866 a day, 77 an hour, each day for 10 months, or 1.3 foreclosures per-minute; therefore,
We the People”, identified as the undersigned petitioners, respectfully request that Governor Brown declare an immediate “Financial State of Emergency”; as a measure to stabilize a recent and dramatic surge in foreclosures in California and that he declare a moratorium on all pending and foreseeable foreclosures within the state;
Furthermore, that the governor proceed with all haste to assist and support the State’s Attorney General Harris in an investigation of any alleged improprieties committed by the banks or bank representatives purportedly involved in the foreclosure crisis, and, thereupon to proceed with the appropriate legal action(s).
We the People” encourage Harris’ office to use the time spent. Over the course of the past 10-months, during costly stalled “settlement negotiations”, wherein, an additional 560,000 foreclosures occurred. This “surge in foreclosures”, reportedly prompted Harris to pull out of negotiations.
Furthermore, the people respectfully request that Harris not enter into additional settlement negotiations with the U. S. Banks, in questions, on matters pertaining to alleged bank-induced homeowner foreclosures; and that no “deal” be discussed nor agreed too, until such time, it has been submitted to the public at large; and ample opportunity to read, review, comment and approval of any such settlement agreement pertaining to the foreclosure crisis is provided to the victims.
Lastly, the Governor should consider suspending all further financial “dealings” or related business with said banks, including, the issuance and/or syndication of General Obligation bonds. Such a declaration should remain in effect, until a full accounting of the U. S. bankers’ actions have been determined by the Office of the Attorney General, and, any and all of the appropriate reparations have been made to the victims of the bank-induced financial crisis.

The Governor has the authority to declare a Financial State of Emergency as provided for in the State’s Constitution, Section 10(f) Article IV of the California Constitution. Both Governor Brown and former Governor Arnold Schwarzenegger used their executive and constitutional powers to declare a Financial State of Emergency, resulting from the state’s annual budget crises. 

Such a moratorium should remain in place, until such time the banks involved in the settlement negotiations provide the state’s attorney general with a “deal” that the foreclosure victims “We the People” can live with; remaining in our homes.