California Governor Arnold Schwarzenegger declared a state of emergency over the state's finances on Wednesday, raising pressure on lawmakers to negotiate a state budget that is more than a month overdue and will need to close a $19 billion shortfall.

The deficit is 22 percent of the $85 billion general fund budget the governor signed last July for the fiscal year that ended in June, highlighting how the steep drop in California's revenue due to recession, the housing slump, financial market turmoil and high unemployment have slashed its all-important personal income tax collection.

In the declaration, Schwarzenegger ordered three days off without pay per month beginning in August for tens of thousands of state employees to preserve the state's cash to pay its debt, and for essential services.

Read it all.

Filed under: * Economics, Politics • Economy • The Credit Freeze Crisis of Fall 2008/The Recession of 2007-- • Politics in General • State Government

1. alcuin wrote: No money? Hasta la Visa, baby! July 29, 11:52 am | [comment link]

2. palagious wrote: I can summon no sympathy for California’s fiscal woes they are ridiculous.  Maybe after the government implodes they will get serious about prioritizing programs and services. July 29, 1:18 pm | [comment link]

3. Capt. Father Warren wrote: Will that 3 days off include the Ruling Class?  Of course not! July 29, 3:16 pm | [comment link]

Registered members must log in to comment.