California declares state of emergency as budget woes deepen
California’s fiscal crisis may have reached critical mass.
Governor Arnold Schwarzenegger – a Republican whose popularity has declined as unemployment rose and the state’s money woes mounted – declared Wednesday a state of fiscal emergency.
The state budget, which should have been completed by July 1, is facing a $19 billion shortfall – a gap so large that closing it will be all but impossible without major budget cutbacks or concessions from state workers.
The latter may have already begun taking effect, and not on a voluntary basis. In concert with the state of emergency declaration, Schwarzenegger ordered 150,000 state workers to take three days of unpaid vacation time. The move, it’s hoped, will help California save on its payroll costs – and while it may not provide significant savings, a spending plan may well be crafted by a thousand tiny cuts to payrolls and state programs.
"Our cash situation leaves me no choice but to once again furlough state workers until the legislature produces a budget I can sign," Schwarzenegger said in a statement.
Bloomberg reports that about 37,000 critical state workers are exempt from the furloughs, which take effect August 1. Exempted are forest firefighters and highway patrol officers – state workers who are seen as vital to the well-being of California residents.
The furloughs come as California continues to struggle with high unemployment. The Labor Department reported July 28 that 12 metropolitan areas have unemployment rates above 15 percent – and fully 10 of those are in California.
The state’s real estate market is still troubled, as well. Between the second quarter of 2009 and the same period this year, foreclosures rose by 4 percent, San Diego real estate data firm MDA DataQuick says.
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