California facing possible 11 billion $ deficit next year as housing, economy drop

[n2doc]

California faces potential $11 billion deficit in budget next year
Tom Chorneau, Chronicle Sacramento Bureau
Wednesday, November 7, 2007

(11-07) 04:00 PST Sacramento --
The meltdown in the housing market and slowing California economy are likely to create a shortfall in the state budget next year of as much as $11 billion, according to estimates made Tuesday.

In response, Gov. Arnold Schwarzenegger has asked department heads to stop spending what they can today and prepare for bigger cuts next year, according to legislative sources.

Schwarzenegger won re-election in 2006 in part because of the perception that he had restored order to the state's chronic spending problems. But the deepening slump in the real estate market, combined with risky assumptions from this year's $145 billion spending plan, have resulted in a return of the big imbalance between what the state takes in and what it spends.

The governor and Legislature will face yet another difficult budget in 2008 that will require either deep spending cuts across the board or perhaps consideration of new taxes - something the Republican governor has resisted in the past.

more:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/11/07/BAM5T7DPN.DTL

That great "Bush" economy strikes again- wasin't it just 2-3 years ago that all the states were in trouble from the lousy economy post 9-11?