EXCERPT In early to mid-July 2009, California looked like it was going to fail to reach a Budget agreement for the following fiscal year. The effects of such a failure would have been catastrophic with state workers not being paid, schools closing, public welfare and healthcare services withdrawn, construction and municipal services grinding to a halt, all of which would have added to the already severe damage inflicted upon the Californian economy by the then ongoing credit crunch. California was not alone amongst the US states in reaching a difficult point in squaring its finances: all but a handful were in deficit over the 2008–09 fiscal year, hit by a combination of drops in income across the board—taxes from earnings, sales, capital gains, and corporate and property revenues falling markedly as a result of increased unemployment or job precariousness, reduced profits or business bankruptcies resulting from the credit crunch, and the collapse of the housing market—coupled with a concomitant increase in welfare, healthcare and other provision costs precisely because state support was needed more when the private sector took the hit…