Governor Declares Fiscal Emergency

With California facing an 11.2 billion budget deficit, Governor Schwarzenegger called lawmakers into a special session Monday and announced a fiscal emergency in the state.

“Without immediate action, our state is headed for a fiscal disaster,
and that is why with more than two dozen new legislators sworn in
today, I am wasting no time in calling a fiscal emergency special
session,” Schwarzenegger said.

Unable to reach a compromise on a plan to reduce state spending and raise taxes, the debate will carry on into the session of new legislators who were sworn in this week.

Legislature Republicans rejected a Democrat-proposed plan to reduce spending by $8.2 billion and raise taxes by $8.2 billion, and instead proposed a stimulus plan that they say will kick-start the economy.

Under new rules adopted by Proposition 58, the Legislature will not be able to address any other issues if the budget crisis is not solved within 45 days.

Also today, the National Bureau of Economic Research announced that the United States is officially in a recession.