Governor Declares Fiscal Crisis

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The same day a government organization finally said the country was in a recession, Gov. Arnold Schwarzenegger declared yesterday that California was in a fiscal emergency and asked that the legislature enter into an emergency session to prevent the state from running out of money.

Schwarzenegger's decision comes as the state faces a $11.2 billion deficit that could cause the state to run out of money as soon as February.

Under the rules of the emergency session, the legislature will have 45 days to pass and send bills addressing the budget crisis to the governor. If it fails to do so, it will not be able to adjourn or pass other bills until the crisis is resolved.

In a recent attempt to close the budget gap, Schwarzenegger proposed a new 1.5 percent increase to the sales tax but was prevented from doing so by the legislature.

Schwarzenegger will now attempt to pass the same plan with the new legislature that includes members elected this November.

While the cuts seem inevitable, many organizations are preparing to cope with what they imagine will be drastic budget decreases.

Berkeley City Councilmember Kriss Worthington said he was confident the city of Berkeley would survive because it set aside money when the economy was growing.

"There is going to be some damage but it won't be as gruesome as other places," he said.

This year, the university had $33 million cut before the governor proposed an additional $65.5 million cut in early November. The UC system was already facing a separate $48 million funding gap from the state before either reduction.

UC spokesperson Brad Hayward said he does not know if the newly elected members of the state legislature will be able to push through the current administrative deadlock.

"It's too soon to tell," he said. "But I think everyone in elected leadership is fully aware of the nature of the budget problem the state is facing."

He said that state officials should remember how higher education contributes to economic growth.

"We're hopeful for a resolution that recognizes the importance of higher education in the state's future," he said. "The state needs to look at higher education as an investment."


Contact Will Kane and Leslie Toy at [email protected]

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