State Employees, Del Mar Fairgrounds Facing Cuts

Gov. Arnold Schwarzenegger is calling for the layoffs of thousands of state employees and slashing billions from education to deal with California's latest budget deficit.

Starting Friday, layoff notices will begin going out to 5,000 state government employees.

The governor has also proposed putting a number of state properties up for sale -- including the Del Mar Fairgrounds.

The Governor says the cuts are painful -- but says we have no other choice. 

The state faces a deficit of $15 billion in the fiscal year that starts July 1. The Governor says that will grow to $21 billion if voters reject the budget-related propositions during a special election next week.

To close the deficit, the Governor wants to cut health spending with a ten percent reduction in Medical payments to hospitals.

He would also cut education by at least $3 billion, shortening the school year by five days -- and borrow $2 billion from local governments.

Prison costs would be cut by transferring illegal immigrant prisoners to federal custody.

Also, the Governor wants to sell some prime real estate -- including the Del Mar Fairgrounds. The property is worth hundreds of millions of dollars.

But the General Manger tells us, there are many restrictions preventing the construction of condos and office buildings and there's a requirement that the annual San Diego County Fair be held every year, no matter who owns the grounds.

The LA Coliseum and the San Quentin State Prison -- which sits on very expensive land in the Bay Area -- on also the 'for sale list'.

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