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• The California budget began 2008 with a deficit of $3.3 billion, but was at risk of reaching a deficit of as high as $42 billion by June of 2009.

  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)

• Fast Facts

  1. New budget strives to increase state revenues by $13 billion and cut spending by $15 billionThe Wall Street Journal: [1] (February 19, 2009)
  2. Budget includes a 1% increase on sales taxesThe Wall Street Journal: [1] (February 19, 2009)
  3. Under the new budget, $8.6 billion will be cut from education and health care spendingThe Wall Street Journal: [1] (February 19, 2009)
  4. California had a 9.3% unemployment rate as of January, 2009Business Week: California unemployment rate jumps to 9.3 percent (January 23, 2009)
  5. Unemployment rate was 5.9% in January of 2008Business Week: California unemployment rate jumps to 9.3 percent (January 23, 2009)
  6. 2,000 public works projects were delayed during budget negotiationsBloomberg.com: California Crisis May Crunch $3.8 Billion of Jobs in Slowdown
  7. On January 26, 2009, Schwarzenegger said the state was in danger of running out of money within daysBloomberg.com: California Crisis May Crunch $3.8 Billion of Jobs in Slowdown
  8. The governor signed the 2009 budget in September 2008Bloomberg.com: California Crisis May Crunch $3.8 Billion of Jobs in Slowdown
  9. Between September and December of 2008, Schwarzenegger called lawmakers into three special sessions and twice declared fiscal emergenciesBloomberg.com: California Crisis May Crunch $3.8 Billion of Jobs in Slowdown
  10. The financial assistance provided to California in the 2009 stimulus package could cover about a third of the gap in California's budget, according to some estimatesSacramento Bee: Feds' stimulus plan could set stage for California budget deal (January 27, 2009)
  11. By February 2009, California's unemployment rate was 10.5%Los Angeles Times: California unemployment hits 10.5% in February

• December 2008 Talks

  Governor Schwarzenegger and California's Democrat-controlled Legislature were at an impasse, having been unable to reach an agreement on how to close the state's growing budget gap. The deficit rose over the previous two years, with job losses and reduced consumer spending continuing to mount.Bloomberg.com: California Crisis May Crunch $3.8 Billion of Jobs in Slowdown

  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)

• January 2009 Talks

  Schwarzenegger and the members of the State Legislature engaged in budget discussions for weeks, but failed to reach an agreement. Republicans resisted proposals to raise taxes and Democrats opposed to spending cuts and proposals to ease environmental regulations and labor rules.Bloomberg.com: California Crisis May Crunch $3.8 Billion of Jobs in Slowdown

  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)

• Related Pages on Mahalo

  California | 2008 California Primary | Arnold Schwarzenegger | Democratic Party | Sacramento

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