California faces major budget shortfall

“The Legislature’s chief budget analyst warned lawmakers Wednesday that an unexpected dip in tax revenues, along with a number of overly optimistic assumptions in Gov. Arnold Schwarzenegger’s budget, leaves the state facing a much larger fiscal problem than the governor’s spending plan reflects. Nonpartisan Legislative Analyst Elizabeth G. Hill… urged the Legislature to begin cutting programs now to keep California from plunging too far into the red. ‘The state still faces many major risks and pressures,’ Hill said at a news conference where she released her analysis of the governor’s budget plan. She projects that about $2 billion in tax revenue the governor’s plan relies on to balance the fiscal 2007-08 budget won’t be there.”