Despite 15 weeks of negotiations over the course of late 2008 and early 2009, state lawmakers were unable to agree to the specifics of a new budget. As deadlines were continually missed, thousands of state employees feared losing their jobs while state public works projects, tax refunds, welfare checks and student loans were suspended. However, on February 19, 2009, legislators finally agreed to a budget. Governor Arnold Schwarzenegger was expected to sign the budget into law in the days following the agreement.The Wall Street Journal: [1] (February 19, 2009) Los Angeles Times: California controller to suspend... (January 17, 2009)

On December 31, 2008, Governor Schwarzenegger's office released a budget plan ahead of the January 10 deadline. The proposal called for sales tax increases and a reduction of state funding to education and health care.Los Angeles Times: Schwarzenegger steps up ... budget plan (January 1, 2009)

In January of 2009, Schwarzenegger proposed a plan to tax several services and activities to raise money for the state, including golf, repairs of cars, appliances and furniture, veterinary care and admissions to amusement parks and sporting events.ABC: CA Governor wants to tax golf, auto repairs (January 26, 2009)