December 14, 2007

State budget deficit now $14 Billion, Governor plans across the board cuts

Just four months ago in August, Governor Schwarzenegger submitted what he called a “balanced budget” to the State Legislature. Apparently his projections were pretty far off, as State finance officials have now determined that the state is facing a $14 billion deficit over the next 18 months, even more than the $9.8 billion projected by Legislative Analyst Elizabeth Hill. As reported by the Sacramento Bee:

Faced with what his staff now estimates as a $14 billion budget hole, Gov. Arnold Schwarzenegger has decided to seek across-the-board cuts to state operations. The administration last month asked departments to prepare hypothetical budgets based on 10 percent reductions for the fiscal year beginning July 1 in case such a move was sought. But now, as the fiscal outlook has worsened, the Republican governor has decided to go forward, according to advocates for social services and local government the governor has summoned in recent days for budget discussions. “Our goal is to be able to spread this as equitably as possible,” said Department of Finance spokesman H.D. Palmer, who would not say what percentage cut the governor will seek or whether it would apply to current year spending.

Schwarzenegger is planning to ask the Legislature for a 10 percent across-the-board reduction in state spending next year, according to sources who have met with the governor this month. The 10 percent figure is a target for all departments, intended to impact every sector of state government equally, the governor told social service advocates this week. Schwarzenegger remained resistant to new tax increases, however, insisting that not enough support exists among legislators and voters.

Filed under California Government, California Politics, Governor Schwarzenegger by

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