Howard Cure cited in Barron's: California's Big, Fat High-Yield Debt

March 8, 2010

Further downgrades in California general obligation debt are likely, even though the state's economy is showing signs of recovery, predicated Howard Cure, director of municipal research at Evercore Wealth Management, in a Barron's article by Randall Forsyth.

The state's problems are traceable to its dependence on volatile high-income and capital-gains taxes, which drive wealthy taxpayers out of state; lack of rainy-day reserves; an unaffordable, generous safety net for citizens; the need for a two-thirds majority in the legislature to raise taxes; and the initiatives process that sets constitutional requirements without providing funding, Cure said.

"California is a role model for how not to manage a large state," Barron's quoted Cure as saying.