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Schwarzenegger Calls Yet another Special Session to Address New $6 Billion Budget Hole

November 17, 2010

Gov. Arnold Schwarzenegger will call a special session of the Legislature in December – during his final weeks in office – in an effort to address a new multi-billion-dollar hole in the recently-approved state budget, which was belatedly adopted (following months of delays) in October.

The outgoing governor's announcement came one day after the non-partisan Legislative Analyst's Office (LAO) projected that California’s state government now faces a “budget problem of $25.4 billion between now and the time the Legislature enacts a 2011-12 state budget plan. The budget problem consists of a $6 billion projected deficit for 2010-11 and a $19 billion gap between projected revenues and spending in 2011-12.” according to the LAO report “California’s Fiscal Outlook: The 2011-12 Budget.”

The Governor’s proposed special session, however, may not amount to much, since Democrats in the Legislature would probably prefer to work with Democratic Gov.-elect Jerry Brown, who takes office on January 3.

In a statement released last Thursday, Schwarzenegger said he wants lawmakers to act quickly on the deficit. He said he would introduce legislation to fill the gap on the same day he calls the session.

Brown was on vacation last week. But Evan Westrup, spokesman for the governor-elect, told reporters, “This special session underscores the enormous challenges facing the state. While the governor-elect did not create this fiscal crisis, he and his transition team will continue the work they started after election day, collaborating with administration and Department of Finance officials, the Legislative Analyst's Office, legislators and others to address California's budget problems.”

The $6 billion hole in the recently-adopted budget comes largely from what the LAO called an unrealistic assumption by legislators and Schwarzenegger: $3.5 billion in federal aid to California that has never been promised by the Obama Administration. The LAO’s report also mentioned unrealistic expectations for savings in prisons, employee compensation and health services, which were also part of the budget deal.

“Many of the solutions that we counted on when we passed the budget we don't think we're going to realize,” said LAO Mac Taylor last week.

Schwarzenegger could run into stiff opposition from Democrats emboldened by Brown's victory.

The special session in December will be the eighth special session called by the governor during his seven years in office.

Source:  EdBrief staff