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peaceandlove · 05-14-2009, 01:09 AM

Schwarzenegger Tells Lawmakers Deficit May Swell to $21 Billion

By Michael B. Marois

May 12 (Bloomberg) -- California’s budget deficit has grown so severe that Governor Arnold Schwarzenegger said he may be forced to release 40,000 prisoners or lay off 51,000 teachers if voters next week reject three budget balancing measures.

The state’s projected deficit will swell to $15 billion between now and June 2010, Schwarzenegger told lawmakers late yesterday. Half the gap falls in the current fiscal year that ends in seven weeks. If voters reject plans to sell bonds backed by lottery profits and siphon tax receipts from tobacco and high earners already dedicated to special programs then the deficit would expand by another $6 billion.

The ballooning deficit comes three months after lawmakers passed a package of spending cuts and tax increases to fill a record $42 billion shortfall and end a cash shortage that prompted officials to prepare to issue IOUs for the first time since the Great Depression. In the intervening months, tax revenue declined further along with the state’s economy.

Article continues: http://www.bloomberg.com/apps/news?p...efer=worldwide

Source Mike at Fever I Am:

05-14-2009, 01:09 AM	#2
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	Re: California Cash Flow Crisis Update Schwarzenegger Tells Lawmakers Deficit May Swell to $21 Billion By Michael B. Marois May 12 (Bloomberg) -- California’s budget deficit has grown so severe that Governor Arnold Schwarzenegger said he may be forced to release 40,000 prisoners or lay off 51,000 teachers if voters next week reject three budget balancing measures. The state’s projected deficit will swell to $15 billion between now and June 2010, Schwarzenegger told lawmakers late yesterday. Half the gap falls in the current fiscal year that ends in seven weeks. If voters reject plans to sell bonds backed by lottery profits and siphon tax receipts from tobacco and high earners already dedicated to special programs then the deficit would expand by another $6 billion. The ballooning deficit comes three months after lawmakers passed a package of spending cuts and tax increases to fill a record $42 billion shortfall and end a cash shortage that prompted officials to prepare to issue IOUs for the first time since the Great Depression. In the intervening months, tax revenue declined further along with the state’s economy. Article continues: http://www.bloomberg.com/apps/news?p...efer=worldwide Source Mike at Fever I Am: