California budget shortfall will limit services
December 10, 2008
SACRAMENTO ” California lawmakers are dealing with an $11.2 billion shortfall for the fiscal year that ends June 30, according to the Associated Press. The deficit is forecast to grow to $28 billion over the next 18 months unless steps are taken to eliminate the red ink.
Gov. Arnold Schwarzenegger declared a fiscal emergency last week and for the third time this year called lawmakers into special session, which met Monday.
He warned that California is in danger of running out of daily operating cash within two months and proposed $4.7 billion in tax increases and $4.4 billion in program cuts.
The state’s nonpartisan legislative analyst, Mac Taylor, told legislators the deficit has grown so much over the last nine months that they can’t balance the budget just with spending cuts.
For instance, he said, to address the deficit solely by cutting programs, the state would have to end all funding for the University of California and California State University systems, all welfare payments and stop paying for developmental services, mental health and in-home support.
Schwarzenegger’s budget proposals include raising the state sales tax by 1.5 percentage points “or a penny and a half on the dollar” for three years, broadening the sales tax to include more services and increasing the Department of Motor Vehicles’ annual fee for registering vehicles in California by $12. The governor also wants to cut about $2.5 billion in education funding this fiscal year.