Tags: california

Schwarzenegger Orders Huge Cuts to Close Budget Gap

Tuesday, 21 Jul 2009 08:11 AM

SAN FRANCISCO -- California Governor Arnold Schwarzenegger and legislators have agreed a plan to solve the state's multi-billion-dollar budget crisis after months of bitter wrangling.

After a day of talks on Monday to close California's 26.3 billion dollar deficit, Schwarzenegger emerged alongside Democratic and Republican lawmakers at the state capitol in Sacramento to announce a deal had been reached.

Few details of the agreement were announced although Schwarzenegger and lawmakers said the revised budget did not include any significant tax increases or cuts to essential services such as education.

"As you can see, we came to a basic budget agreement and obviously we're very happy," Schwarzenegger said. "We've accomplished a lot and I want to thank the legislator leaders for hanging in there. It was like a suspense movie."

Schwarzenegger and state lawmakers had been at loggerheads for months over how to solve California's deficit, which had pushed the state to the brink of bankruptcy and forced the world's eighth largest economy into issuing IOUs.

Republican Governor Schwarzenegger had vowed to narrow the deficit by cutting funding for a wide range of social services while steadfastly vowing to veto any proposals from lawmakers that would increase taxes.

"This is a budget that has no tax increases and a budget that is cutting spending," Schwarzenegger said Monday. "We're protecting education and making government more efficient and cutting waste and abuse.

"All around this is a really great achievement."

Democratic majority leader Karen Bass said the state had reached agreement on plugging the budget hole without slashing funding to programs designed to help California's neediest as had been threatened by Schwarzenegger.

"After several weeks we have closed the deficit in a responsible manner," Bass said. "We have protected the safety net and that was very important in these times."

California Assembly minority leader Sam Blakeslee said the budget would help the state return to fiscal stability. "None of these were easy choices," he said.

Precise details of the proposed budget were not clear although US media reports said the deficit would be closed by around 15 billion dollars in cuts and four billion dollars borrowed from local governments.

Other monies would be raised through the early collection of taxes and shifting more than one billion dollars worth of pay to state workers from this fiscal year to the next.

Schwarzenegger's proposal to allow oil drilling off the coast of Santa Barbara, northwest of Los Angeles, would also help generate revenues of around 100 million dollars a year, according to reports.

California's latest budget crisis came less than five months after marathon negotiations resulted in tax increases and spending cuts to eradicate a 42-billion-dollar hole in the budget.

Since then, California's deficit has spiraled as soaring unemployment and one of the worst home foreclosure crises in the United States have sent state revenues plummeting to levels not seen since the 1990s.

The latest proposed budget is due to be voted upon on Thursday in Sacramento.

Copyright © 2009 AFP. All rights reserved.

-

   
1Like our page
2Share
Economy
SAN FRANCISCO -- California Governor Arnold Schwarzenegger and legislators have agreed a plan to solve the state's multi-billion-dollar budget crisis after months of bitter wrangling.After a day of talks on Monday to close California's 26.3 billion dollar deficit,...
california,
499
2009-11-21
Tuesday, 21 Jul 2009 08:11 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved