Gov. Schwarzenegger has only had to furlough California workers, not terminate them. Image from Wikimedia Commons.

Governor Arnold Schwarzenegger has been cleared to furlough California state workers. The governor has had little help in easing a California budget crisis for years. The state of California has had chronic budget shortfalls for the past several years. Schwarzenegger had to resort to a furlough of state workers, but was sued to keep him from doing so. The California Supreme Court has upheld his power to enact a state furlough.

Court upholds furlough order

Governor Schwarzenegger was forced to furlough California state employees in order to save money. The workers would work two fewer days per month, without pay. The initial furloughs were ordered in 2008, and extended to three days in 2009. When the state furlough orders were renewed in 2009, Governor Arnold Schwarzenegger was sued by the Professional Engineers in California Government. The claim was that the days off were illegal. The California Supreme Court, according CNN, ruled in favor of the government. The furloughs will save the state of California $80 million per month.

Golden state running out of gold

The state of California has had a running budget crisis for the past several years. As real estate values and employment plummeted, the state was left with a drastic budget deficit. A California budget deficit has been an annual fixture. Governor Schwarzenegger has been opposed at every turn by legislators and other parties. He has maintained that he is not in favor of the furloughs, but is forced to resort to a state furlough of workers in order to reduce the deficit. The California budget deficit stands at $19.1 billion for this year, according to Bloomberg.

Less revenue equals less to spend

The state of California has been in perpetual crisis mode for the past two years. The governor and the state legislature are supposed to reach an agreement over the budget later this month.The legislature was in favor of the furloughs.

Sources

Bloomberg

CNN

The California budget crisis 2010 is forcing Gov. Arnold Schwarzenegger to make deep cuts in programs for the poor, but he vows not to increase taxes. Picassa Web Albums photo.

The California budget was released by Gov. Arnold Schwarzenegger Friday. It outlines bleak fiscal realities for the government of a state that is out in front with most national trends. Decades of tax revolts and governing at the ballot box have converged with the Great Recession to create the California budget crisis of 2010.

The California budget deficit

In attempt to close a $19 billion California budget deficit in the fiscal year beginning next month, Schwarzenegger sounded like he could use a quick personal loan. He called for deep cuts that include a welfare to work program that would affect 1.4 million people, two-thirds of them children. The Associated Press reports that the Republican governor laid out the most severe cuts to health and welfare programs since the recession started fueling the California budget deficit nearly three years ago. He said cuts to government services over the past few years have done away with the “low-hanging fruit.”

California budget crisis 2010 and Medi-Cal

Even with the deep cuts announced Friday, the California budget crisis of 2010 may continue to get worse — thanks to health care reform. The Sacramento Bee reports that California’s Legislative Analyst’s Office found that as many as 2 million more Californians could become eligible for Medi-Cal coverage after the federal health reform law takes effect. Medi-Cal is California’s Medicaid program. The health reform law calls for the federal government to cover initial costs for newly eligible enrollees, but the expanding program is expected to add its toll to California’s shrinking budget.

California budget bad news

California budget news is bad. Low tax revenue is severely worsening California’s budget deficit. The state’s 12.6 percent unemployment rate ranks among the highest in the nation. In April, revenue from personal income tax was $3 billion less than projected. The state’s general fund spending will be $83.4 billion for the new fiscal year, the lowest level in six years. The $19 billion deficit accounts for more than 20 percent of all projected spending.

More bad news for California budget

Spending cuts are the only solution being considered for balancing the California budget. Schwarzenegger
and Republican lawmakers have vowed not to raise taxes. CalWORKS, the state’s welfare-to-work program that was cut Friday, helps single mothers find child care while they go to school to learn new skills. Children from low-income families, the disabled and seniors who rely on state services are bearing the brunt of California’s budget crisis.

California budget showdown looming

The California budget has been affected in recent years as Schwarzenegger and Republicans won a series of corporate tax credits and giveaways, costing the state treasury an estimated $2 billion per year. As reported on taragana.com, Democratic leaders responded forcefully to the latest California budget proposal, saying they will not allow programs for the needy to be gutted. It’s not clear how those programs will be sustained without a tax increase.