Governor To Declare Emergency Session To Address Budget Gap

This week, Gov. Arnold Schwarzenegger (R) is expected to issue an emergency declaration to compel the Legislature to address a nearly $6.3 billion budget deficit remaining in the current fiscal year, Capitol Weekly reports.

After the governor calls an emergency session, lawmakers will have 45 days to act on his proposals or pass their own budget plan. If lawmakers fail to act within the 45 days, they will be barred from adjourning or passing any other bills until the budget situation is resolved.

Schwarzenegger is expected to describe his proposals by Friday, when he will present his budget plan for FY 2010-2011.

Expected Proposals for FY 2010-2011

In addition to the current $6.3 billion budget gap, California is expected to face a $14.4 billion deficit for FY 2010-2011. The projections bring the state's total estimated shortfall to $20.7 billion over the next 18 months.

The deficit likely will prompt Schwarzenegger to consider eliminating In-Home Supportive Services and other health and social service programs. 

Officials said the governor's plan for the upcoming fiscal year likely will:

• Delay a series of corporate tax breaks scheduled to take effect next year;
• Include tax maneuvers designed to tap money from local transit agencies;
• Prolong some temporary tax increases scheduled for expiration; and
• Reduce state worker compensation through furloughs or wage cuts (Howard/York, Capitol Weekly, 1/5).

California Continues Lobbying for Federal Aid

Schwarzenegger also is expected to continue lobbying Congress for increased federal funding, according to spokesperson Aaron McLear.

McLear noted that the state receives about 78 cents for every dollar it sends to the federal government.

The governor is expected to ask federal officials to waive regulations that require California to pay matching funds for federal health care programs and other services (Williams, AP/Ventura County Star, 1/6).

Editorial

California officials should "tell their counterparts in Washington that this state's taxpayers can no longer be expected to be the ATM for the rest of the nation," a Stockton Record editorial states.

The editorial continues that "the federal reimbursement rate for the state Medicaid program forces the state to subsidize health care costs for other states" (Stockton Record, 1/6).

State of the State Address