Facing an $11.2 billion budget deficit, Gov. Arnold Schwarzenegger has declared a state fiscal emergency.
He made the announcement in Los Angeles on Monday. A looming $28 billion deficit is predicted over the next 19 months. The state also is likely to run out of cash in February unless the governor and lawmakers make corrections.
"Without immediate action, our state is headed for a fiscal disaster, and that is why with more than two dozen new legislators sworn in today, I am wasting no time in calling a fiscal emergency special session," Schwarzenegger said in prepared remarks.
The Republican governor and Democrats in the Legislature have proposed a combination of tax hikes and spending cuts, but Republican lawmakers have remained steadfast in their refusal to raise taxes. Lawmakers failed to reach a compromise during the special session he declared last month, pushing the problem to a new Legislature that was being sworn in Monday.
Lawmakers are facing one of the worst budget crises in state history and a sinking economy that will limit their ability to enact new programs. Brimming with fresh energy and new ideas, 11 new senators and 28 new Assembly members will take their oaths of office only to face the grim task of having to plug a hole in the state budget that is predicted to reach $28 billion within about 18 months.