California declares fiscal emergency
Published: 02 July, 2009, 05:30
TAGS: Crisis Chronicle, Budget, USA, Economy, Finance
As the U.S. has begun a new fiscal year, the state of California has failed to balance its budget, which now has a 26.3 billion dollar deficit. Governor Arnold Schwarzenegger has declared a fiscal emergency.
California lawmakers have been deadlocked in debate about whether to raise taxes to help tackle the budget gap.
However, while Democrats want tax increases, Republicans insists on spending cuts.
Governor Schwarzenegger, a Republican himself, has ordered state offices closed three days a month to save money. And he is determined to settle the problem his way:
“Though the legislature failed to solve our budget problem yesterday, rest assured that solving the entire deficit remains my first and only priority, and I will not rest until we get it done. I will not be a part of pushing this crisis down the road – the road stops here,” Reuters quoted Schwarzenegger as saying.
The legislature now has 45 days to balance the budget. In case they fail to do so, they will not be able to vote on other bills.
California is the most populous state in the U.S. and was ranked as having the eighth largest economy in the world in 2006.
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