California is in deep doo-doo again!!

California again faces massive deficit, projected at $21 billion
The state's chief budget analyst foresees a fiscal mess extending past the recession for years to come. He puts much of the blame on unrealistic budgeting assumptions.

Reporting from Sacramento - California government is again beset with red ink, facing a nearly $21-billion deficit over the next year and half, according to a report released today by the state's chief budget analyst.

Nonpartisan Legislative Analyst Mac Taylor projected state spending severely out of line with tax collections not just amid the current recession but for years to come. Solving the fiscal mess will require "painful choices" in both cutting services and raising revenue, Taylor warned.

The gloomy forecast, which comes after Sacramento officials have already raised taxes and slashed programs this year, portends a fierce budget battle again in 2010.

Gov. Arnold Schwarzenegger, who last week predicted more across-the-board budget cuts, in January must unveil his plan to address the deficit.

"We look forward to receiving the governor's new budget proposal in January," Assembly Speaker Karen Bass (D-Los Angeles) said in a statement, "and will immediately begin work on crafting budget solutions that will once again require both difficult spending reductions and additional revenues."

The legislative analyst, whom both Republicans and Democrats look to for fiscal advice, reported that the current budget year accounts for $6.3 billion of the deficit. Much of that is the result of unrealistic budgeting assumptions that have evaporated in the four months since lawmakers and Schwarzenegger agreed on a spending plan.

That budget, currently in place, assumed receipts of nearly $1 billion from the federal government for Medi-Cal, a sum the analyst questioned. Another $1 billion was assumed from the sale of a quasi-public workers' compensation agency that has stalled. Prison spending has outstripped its allotment, and schools are owed more than had been expected under the state's complex funding formula.

An additional $14.4 billion of the deficit is for the fiscal year that begins next summer.

The deficit is expected to be worse in the years beyond, as temporary taxes expire and raids on local government funds must be repaid by Sacramento. The analyst projected a $21.3-billion deficit in fiscal 2011-12 and $23 billion in 2012-13.

Even those numbers could turn out to be conservative. The figures assume that California wins all its pending court cases, in which billions in spending reductions are being challenged.

The forecast also assumes no cost-of-living adjustments for state workers and programs, after the Legislature suspended them this year.

Management assignment 11/12/2009

For this assignment I am going to use as a consumer item a new Blu-ray player. Analyzing this using the four Ps of marketing that are product, price, place, and promotion (Nichels, McHugh, & McHugh, 2008, p. 352). These factors are the marketing mix.

First step is to find a product that is in demand. Blu-ray players are big today and consumers want extra bells and whistles in their electronic purchases. Next is setting up a price for the product. Your price needs to remain competitive to other Blu-ray players on the market. Setting the price too high for comparable features would keep consumers from purchasing your product. Not charging enough and the company will lose money and quickly be out of business. The company needs to find the “sweet spot”. Third, is place. The Blu-ray player is an electronic device and will be purchased from an outlet such as Best Buy or similar electronic outlet stores. People looking to buy consumer electronics will shop these stores and the company needs product in the mix to move units. Fourth in the mix is promotion. The company may design an eye-catching flyer to accompany the player on the store shelf. There can be a large banner placed in front of the store announcing the new addition to the Blu-ray player scene. The company must develop some sort of consumer relationship (Nichels et al., 2008, p. 356). Obtain customer feed back with questionnaires or handouts. Ask the customer how to improve the product or what options they need in the next model.

Marketers must watch closely the economic climate of the products they are promoting. Take the housing market crash that has occurred over the last couple of years. Not keeping a close watch on economic developments caused many small and large businesses to go under. Keep watchful of signs of economic change to the target market. Consumers need to have a desire for a product and the resources to purchase the product. An overpriced item that the consumer purchases and has regrets having paid too much is cognitive dissonance (Nichels et al., 2008, p. 367). The customer must be reassured that purchasing the product is a good decision.

I have purchased in the past products that were marketed directly to me and my demographic. That item would be Williams Lectric Shave. As their marketing campaign goes, “It makes your beard stand up for a smoother, closer shave”. I have never been able to use an electric shave but once in a while I try them out again. I do not receive a nice, close, and clean shave with an electric. I am a blade guy, always have, always will. An item that I have purchased that is not marketed to my specific demographic is ponytail hair bands. Ponytail hair bands are marketed to women, but as my hair is longer, I like to keep it clean looking. I want to project a professional image and unkempt hair is not the way to go.

Reference
Nichels, W. G., McHugh, J. M., & McHugh, S. M. (2008). Management, leadership, and employee empowerment. In Understanding business (pp. 180-203). New York, NY: McGraw-Hill Irwin.