California Territory?

Oh, come now. But California's budgetary situation is desperate, as reported by David Dayen in the FDL News Desk blog:

“I looked as hard as I could at how states could declare bankruptcy,” said Michael Genest, director of the California Department of Finance who is stepping down at the end of the year. “I literally looked at the federal constitution to see if there was a way for states to return to territory status.”

This quote comes within a piece explaining that states will face continued fiscal pressures, particularly once the stimulus aid to them runs out in 2011. While not sufficient to stave off major reductions in state spending during the recession, the stimulus money did save tens if not hundreds of thousands of jobs in the states, particularly in education...

The Pew Center on the States released a study this week, concluding that ten states – Arizona, California, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin – will face near-term budget crises, necessitating either major spending cuts or tax hikes.

In a separate news briefing Wednesday, Iris Lav, a fiscal policy expert at the Center on Budget and Policy Priorities, warned that state budget cuts could cost the economy 900,000 jobs in 2010...

Notably, in five of the ten states – Arizona, California, Florida, Nevada and Oregon – constitutional statutes or state ballot measures have limited the ability of legislatures to raise taxes or cut certain types of spending. That fiscal straitjacket makes finding
solutions in the absence of federal aid almost impossible.

Interestingly, one of the commenters to this post suggested the solution:

There is an alternative that will work fiscally although I am loath to suggest it. We could leave the union. This would end the vast annual tax transfer – our huge transfer of business and income tax to shore up lesser developed and inevitably red regions of the US (CA is, even in it’s crisis, a net donor state). Of course this would threaten their fiscal stability, but, to be blunt, I no longer care. We’ll lease back our land if the US still wants their military bases and stuff, on our territory. We’ll have a dynamic, technology-focused economy, we’ll be able to commit to a green and renewable energy transformation, we’ll be able to enact universal healthcare, highly progressive taxation policies, we’ll have ethnic toleration, and, since American lobbyists like the NJ Knights of Columbus and NOW will be foreign entities and
thus subject to regulation, we might even be able to enact gay marriage.

This comment proves that secession need not be the sole province of so-called "right-wing wingnuts." Those who like California the way it is, with same-sex marriage and all that, could have their Republic the way they want it. And however much some of us may disagree with the way they would run it, it is their right; just as it is our right in Ohio to run our future Republic the way we want.

No, California, returning to a territory is going backward, and that's not like you. Move forward and declare your independence! Then fix your problems your own way!

Virtual buckeye to Gary Flomenhoft at Vermont Commons.