Gov. Schwarzenegger declares fiscal emergency

California Governor Arnold Schwarzenegger declared fiscal emergency Monday in response to the state’s deteriorating finances and called lawmakers into a special session to address California‘s $11.2 billion deficit, the LA Times reported.

Schwarzenegger, a Republican, wants legislators to raise taxes and cut spending to narrow the gap that is projected to swell to $28 billion over the next 18 months. He invoked powers granted him in 2004 to declare a fiscal crisis, which gives the Legislature 45 days to plug the shortfall. If they fail to find a solution in that time, they are barred from doing any other legislative work until they do.

schwarzenegger declares fiscal emergency

Despite the warning, there is little indication that California’s partisan gridlock has waned enough to allow for an easy resolution to the state’s 28-billion-dollar budget gap, analysts said.

Now, I compare the situation that we are in right now to finding an accident victim on the side of the road that is bleeding to death,” Schwarzenegger said at a news conference at his Los Angeles office. “We wouldn’t spend hours debating over which ambulance we should use, or which hospital we would use, or which treatment the patient needs. No, we would first stop the bleeding, and that’s exactly the same thing we have to do here.”

While the cuts seem inevitable, many organizations are preparing to cope with what they imagine will be drastic budget decreases.

According to The Daily Californian, the city of Berkeley would survive because it set has aside money when the economy was growing.

“There is going to be some damage but it won’t be as gruesome as other places,” Councilmember Kriss Worthington said.

Across the US, state tax revenues are down because of the economic slump.

State governors are to meet President-elect Barack Obama later on Tuesday to press the case for federal help.

Photo: The Los Angeles Times