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California legislators tonight (July 20) reached a deal to close the $26 billion budget gap. According to the New York Times, the deal contains $15.6 billion in spending cuts, about $2.1 billion in borrowing, $3.9 billion in new revenues and $2.7 billion in accounting trickery, such as shifting a payday into the next year. Gov. Arnold Schwarzenegger had said he wouldn't juggle the books, but backed down. The state will tap the coffers of municipalities. The state will borrow $2 billion in property taxes from localities, some of which are suffering almost as much as the state. The localities would have to be repaid in three years. Public education will take a huge hit. Some $11 billion had already been cut from public schools, and another $650 million will get whacked. The state's health insurance program for children will be cut, but not as severely as earlier feared.
California legislators tonight (July 20) reached a deal to close the $26 billion budget gap. According to the New York Times, the deal contains $15.6 billion in spending cuts, about $2.1 billion in borrowing, $3.9 billion in new revenues and $2.7 billion in accounting trickery, such as shifting a payday into the next year. Gov. Arnold Schwarzenegger had said he wouldn't juggle the books, but backed down. The state will tap the coffers of municipalities. The state will borrow $2 billion in property taxes from localities, some of which are suffering almost as much as the state. The localities would have to be repaid in three years. Public education will take a huge hit. Some $11 billion had already been cut from public schools, and another $650 million will get whacked. The state's health insurance program for children will be cut, but not as severely as earlier feared.