California braces for brutal budget cuts

Gov. Arnold Schwarzenegger sees a voter mandate for his plan to slash billions, and Democratic leaders say they won't hesitate to make deep cuts that could antagonize their allies.

By Patrick McGreevy and Michael Rothfeld
LA Times
May 21, 2009

Reporting from Sacramento — Gov. Arnold Schwarzenegger and lawmakers scrambled Wednesday to avert a financial meltdown, and public officials across California braced for annihilating cuts on the day after voters trounced their leaders' rescue plan for the state.

Within two hours of returning from Washington, D.C., the governor huddled behind closed doors with Democratic and Republican legislative leaders to grapple with a projected $21.3-billion budget shortfall for the coming fiscal year and stop state government from running out of money by July.

But the Republican governor delivered at least a bit of good news: Obama administration officials had backed off their threat to rescind $6.8 billion in federal stimulus money.

The hacking of government began quickly, by the hand of a little-known state panel that sets elected state officials' pay. Citing a need for shared sacrifice, the group decided to reduce those salaries by 18% starting next year.

(More here.)