Legislators in California put the state another $2 billion in the hole by failing to meet an important deadline, but the not-so-Golden State isn’t the only one with budget woes. Six other states — Arizona, Connecticut, Illinois, Pennsylvania, North Carolina and Ohio — are also struggling to fix their spending gaps.
Most have not yet approved a budget, although it was due at the start of the fiscal year, July 1. Arizona passed a $8.4 billion budget this week, but the governor called it “fatally flawed” and wants the state Senate and Assembly to re-convene on Monday to hash it out again.
In California, lawmakers approved a budget in February, but must now come up with more spending cuts to cover a $24.3 billion shortfall in revenue, caused by the steep decline in the economy. On Wednesday, Gov. Arnold Schwarzenegger declared a fiscal emergency less than 12 hours after state lawmakers were unable to adopt a plan.
A missed deadline June 30 to make cuts in education worsened California’s budget crisis Wednesday by $2 billion, and now, the fiscal hole will deepen by millions each day that a solution is not passed.
Schwarzenegger also ordered the state’s 220,000 workers to take a third unpaid furlough day a month to save the state an additional $425 million this year. The state may run out of cash by July 28; in the meantime, the state is issuing IOUs to contractors, welfare recipients and others who get state assistance.
Schwarzenegger’s fiscal emergency declaration orders the Legislature to immediately hold a special session to solve the state’s deficit.
In other states, the situation is not quite as dramatic as California’s woes, but still serious. Pennsylvania and Illinois officials say they will keep essential operations going but a protracted stalemate could begin affecting day-to-day services in a few weeks.
Shutdowns were not a threat in Connecticut, North Carolina and Ohio, because those states have provisions to temporarily spend without a budget.
Schwarzenegger’s emergency declaration limits lawmakers to 45 days to take action on the budget. If they miss the new deadline, the Capitol will be brought to a virtual standstill, with legislators barred from taking up any matter unrelated to the budget.
Talking to reporters Wednesday, the Governator sounded disgusted with the whole thing.
“Instead of negotiating, Democrats and Republicans in our office, they decided to have endless amounts of hearings and debates, finger-pointing and assigning blame. At the end of the day, nothing was accomplished,” he said.
