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News Link • Economy - Economics USA

Arnie Freaks Out: California Declares State Of Emergency Over State Finances

Quite possibly this has something to do with the fact that Arnie just had a very vivid Total Recall from the future in which California had filed Chapter 66 (a brand new invention in honor of the famous route), mere months after he had decided to institute the latest round of furloughs and once again paying using IOUs. From Reuters: Increasing pressure on lawmakers to negotiate a state budget that closes a $19 billion shortfall, California Governor Arnold Schwarzenegger declared a state of emergency over the state's finances on Wednesday. In the declaration, Schwarzenegger ordered three furlough days per month beginning in August for thousands of state employees to preserve the state's cash to pay the state's debt obligations and for essential services. California's budget is several weeks overdue and Schwarzenegger and top lawmakers are at impasse over how to balance the state's books. Analysts say it could be several more weeks before the Republican governor and leaders of the Democrat-led legislature reach an agreement, a delay that may threaten to lower the state's already weak credit rating, now hovering just a few notches above "junk" status.

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