CA budget on even more rocky ground

October 7, 2008 6:18:50 PM PDT
Governor Schwarzenegger says the state's budget is in even bigger trouble now, because of the down economy. That's confirmed by a new report from the State Treasurer who says the first quarter of the fiscal year is over and the state is already short $1.1 billion dollars.

The ink is barely dry from Governor Schwarzenegger's signing of the most overdue state budget ever, and state leaders must re-visit California's spending plan. The Governor warned on Tuesday turmoil in the financial markets and declining tax revenue mean there isn't enough money to pay for government services.

"We have to even make additional cuts as times go on because I think there will be even less revenues coming in," says Gov. Arnold Schwarzenegger (R) of California.

So the Governor will meet with Legislative leaders to discuss the budget situation and perhaps call a special session. Raising the sales tax to boost state coffers is out of the question because Republicans would never go for it. And the Governor's push to lease the lottery may not be viable either because the now bankrupt Lehman Brothers was handling the deal. The Senate President says more budget cuts may be the only answer including early release of prisoners.

"Corrections is always one, where you take some of the low level offenders. That drives the Republicans nuts, but they're going to have to make some choices. If they don't want to do that, you want to cut education," says Senator President Don Perata (D) of Oakland.

In a down economy, the Constitutionally-guaranteed minimum funding for schools automatically drops. The prospect of more cuts mid-year to classrooms sends shivers throughout the education community.

"We just can't let people go all of a sudden. So where you cut is from the meat and bones of the curriculum and structural programs that are running in public schools. That hurts and has long-term effects," says Kevin Gordon, Public Schools Lobbyist.

To make matters worse, a federal judge is set to deepen the state's financial crisis by forcing California to pay part of the $8 billion in court-ordered improvements to the prison healthcare system.


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