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The deadline for legislators to pass California’s budget for the next fiscal year was June 30th. Now, nearly a week behind schedule, the $24 billion shortfall has grown by an extra $2 billion during the deadlock. On Thursday Governor Schwarzenegger declared a state fiscal emergency, ordering state offices to close three days a month to save money and issuing IOUs to vendors. Under the declaration, if the budget cannot be passed within 45 days, the legislature cannot adjourn or tackle other bills until it resolves the deficit. The Governor and the Republican minority in the Assembly have vowed to fight against any new taxes but a budget compromise seems to be in the works with lawmakers negotiating over the long weekend. Meanwhile, an investigation last week by the San Jose Mercury News found that California is indeed broke because of out-of-control spending. But much of that spending is on programs that the Governor has spearheaded and defended such as the state’s vast prison system and the Three Strikes law that puts more people in prison. Additionally, the Governor, as part of his election campaign, forced through major cuts in vehicle licensing fees which lost the state much needed revenue. The Mercury News also found that “general fund spending on K-12 schools and social services, like welfare, actually grew less than the rate of inflation and population growth.”

GUEST: David Greenwald, Editor of the California Progress Report

For more information, visit www.californiaprogressreport.com.