Above The Fold 06.03.09

California OR IS Bust!…State budgets looking for hangover remedies, docs say cure could be years away…Indictments for technology contracts being handed out like takeout menus in Mass. and Virgina…Utility commissions want to be in the broadband huddle…DMV face recognition gets time in the spotlight…

A joint session of the California Legislature was held yesterday to give Governor Arnold Schwarzenegger a chance to rally his colleagues, the Los Angeles Times reports. Gov. Schwarzenegger told the assembled group that the state faces fiscal insolvency within two weeks if proposed cuts to welfare, health care, parks, prisons and many other areas are not made. The governor, seeing an opportunity in the crisis, tried to revive his previous failed proposal to “blow up the boxes” of state government by reorganizing agencies, eliminating boards and commissions, and making government more efficient. “People are writing California off,” he said. “They are talking about the end of the California dream. They don’t believe that we in this room have the courage and the determination to do what needs to be done or that the state is even manageable.”

According to the Wall Street Journal, if you think state budgets look bad now, you haven’t seen anything yet. A downward spiral of tax revenue is set to perpetuate and inhibit state budgets for years to come, at the same time states are dealing with increased demand for health-care, assistance benefits and pension programs. States with as diverse economies as California and South Dakota or Arizona and Tennessee face similar problems, stemming from increased job loss and increased reliance on state programs. “There are so many issues that go way beyond the current downturn,” said Scott Pattison, executive director of the National Association of State Budget Officers. “This is an awful time for states fiscally, but they’re even more worried about 2011, 2012, 2013, 2014.”

A federal grand jury indicted a former Massachusetts House speaker and three friends for allegedly pocketing tens of thousands of dollars in payments from a software company in exchange for lucrative state contracts, the Boston Globe reports. Salvatore F. DiMasi resigned in January amid concerns that he and former campaign friends conspired to land software contracts for a company named Cognos ULC. According to authorities, DiMasi’s cut of the kickbacks was around $60,000, though hundreds of thousands went to the cumulative group.

A similar story is brewing out of Prince William County, Virginia’s information technology office, where the Washington Post reports two county employees began a side business to bid on contracts from the office they already worked. Maneesh Gupta and John Roessler started Praetorian Systems designed to syphon $9 million of the county’s contracting budget to Praetorian, keeping nearly $4 million of that money for themselves. Roessler’s attorney Michael Sprano said, “It was never his intent to steal from the county. His intent was that the county would always be charged a fair price, he would do good work and they would get what they paid for.”

The National Association of Regulatory Utility Commissioners wants the federal agencies overseeing broadband stimulus funds to consult with states before disbursing the money to avoid project delays, InformationWeek reports. “The recent announcement that funds are now targeted to be released at the end of the year has an unfortunate and undoubtedly unforeseen unfair impact on grant proposals,” they wrote. “By December winter conditions in many states will, at a minimum, certainly inhibit construction activity. It appears this delay in releasing the funds is related to perceived difficulties in processing and reviewing the anticipated flood of applications each agency is likely to receive.”

The Indiana Bureau of Motor Vehicles is crediting a new facial recognition system for catching a parolee trying to get a sixth fake id, according to the Associated Press. BMV Commissioner Andy Miller said, “The only way we caught this guy was through the facial recognition system.” According to Miller the technology has spotted 463 discrepancies in photos so far in 2009.

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