California faces potential $11 billion deficit in budget next year

San Francisco Chronicle ^ | 11/7/7 | Tom Chorneau

[SmithL]

Sacramento -- The meltdown in the housing market and slowing California economy are likely to create a shortfall in the state budget next year of as much as $11 billion, according to estimates made Tuesday.

In response, Gov. Arnold Schwarzenegger has asked department heads to stop spending what they can today and prepare for bigger cuts next year, according to legislative sources.

Schwarzenegger won re-election in 2006 in part because of the perception that he had restored order to the state's chronic spending problems. But the deepening slump in the real estate market, combined with risky assumptions from this year's $145 billion spending plan, have resulted in a return of the big imbalance between what the state takes in and what it spends.

The governor and Legislature will face yet another difficult budget in 2008 that will require either deep spending cuts across the board or perhaps consideration of new taxes - something the Republican governor has resisted in the past.

"If we kept cutting our way out of this, ultimately you are going to have a lot of axes on the table and a lot of blood," said Assembly Speaker Fabian Núñez, D-Los Angeles. "I don't think Californians want to see drastic cuts left and right - they seem to be more compassionate than we give them credit for."

The current budget, adopted in August after a two-month impasse, was considered by many a victory for conservatives because of its austerity. The plan provided a record reserve of $4 billion and paid off $2.5 billion in bond debt early, while providing for all major services.

[SmithL]

The current budget, adopted in August after a two-month impasse, was considered by many a victory for conservatives because of its austerity.

Austerity? What a crock!

[SmithL]

Where’s Tom McClintock when we really need him?

[Califreak]

Interesting. About the same amount of money being spent on illegals.

[purpleraine]

Just about the same amount we spend on services to illegals.

[fhayek]

But they do the jobs that Americans won’t do... ;^)

[maine-iac7]

Reagan took it over in the red, left it in the black - HE was a real = and rare = republican

[purpleraine]

computer programming?

[Eric in the Ozarks]

I’m still laughing. They pay $400,000/year to “provosts” at the UC system. Retired police chief takes $350,000 on the way out the door. Some austerity.

[goldstategop]

The August budget did NOT cut anything. It was balanced with phony math derived from Enron accounting wizardry. Republicans wanted real cuts but were savaged for proposing them by the MSM, the Democrats and the Governator.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Chode]

do I really have to say it???

[NormsRevenge]

California faces potential $11 billion deficit in budget next year

—

Double that figure and you’re getting close.

The budget spending increases at 10% a year since Herr GuberMeister stepped on the scene will go down in the annals of state history as one of the most egregious ramp-ups of spending anywhere in the history of this nation... (except for the bloational increases in federal spending the last 30 years)

[PGalt]

Mexifornia. The road to 3rd world.