California is in trouble. With a budget deficit that state leaders are grappling to close and an unemployment rate expected to climb to as high as 13.5 percent by early 2010, what began as a dilemma has escalated to a crisis. Sacramento is in no better shape. Perhaps harder hit than any other California city, our economy stands to lose around $1 billion dollars over the next 18 months due to layoffs and unpaid furloughs imposed on state workers.

Because state workers make up over 9 percent of our workforce, as the Sacramento Business Review reports, even a 5 percent reduction in state and local government employment would add an additional 1.1 percent to our regional unemployment rate.

While an immediate solution is not apparent, there are steps we can take to ensure that the bleeding does not persist and we do not find ourselves in a similar situation in the future.

Over the last several years, like California, Sacramento has spent more than it has and deficits have been patched with reserves. This has lead to deficits hovering around $26 billion and $58 million dollars, respectively.

In Sacramento, an external audit will enable us to effectively plan our strategy to deal with our budget deficit head-on, while simultaneously devising a strategy to prevent a similar crisis in the future.

This economic recession has contributed significantly to our budget woes. But local and state leaders must make a focused effort to proactively address that which we can control. 

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