Schwarzenegger to discuss drastic California cuts

Governor plans to meet with state leaders after voters reject budget initiatives aimed at cutting huge deficit.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

arnold_schwarzenegger.03.jpg
California Gov. Arnold Schwarzenegger says the state must address a $21.3 billion shortfall after voters rejected initiatives to ease the problem.
What do you think about the Obama administration's new automotive fuel standards?
  • They're good
  • They're not strong enough
  • They'll hurt the economy

ATLANTA (CNN) -- California Gov. Arnold Schwarzenegger said he would meet with state leaders Wednesday after voters panned a handful of ballot measures designed to pull the state out of a deepening budget crisis.

Californians voted down five of the six propositions in a special election Tuesday. More than 60% of voters shot down each measure, according to final tallies Wednesday.

Schwarzenegger had said that, if the propositions failed, he would have to make drastic cuts to education and health care, and would probably free many inmates from the state prison system.

With all six measures defeated, the deficit would surge to $21.3 billion, Schwarzenegger's office said last week. Even if all the measures passed, the deficit would hit $15.4 billion at the start of the new fiscal year in July.

Schwarzenegger spoke about the apparent defeat late Tuesday.

"Tonight, we have heard from the voters, and I respect the will of the people who are frustrated with the dysfunction in our budget system," the governor said in a statement. "We face a staggering $21.3 billion deficit, and in order to prevent a fiscal disaster, Democrats and Republicans must collaborate and work together to address this shortfall. The longer we wait, the worse the problem becomes and the more limited our choices will be."

Officials had expected low turnout for the special election, with some voters expressing fatigue, while others were put off by the complex issues.

A CNN photographer spent two hours waiting for voters at two polling places in Los Angeles on Tuesday morning, and encountered just one.

The one ballot measure that passed was a provision that prevents certain state officials from receiving pay raises when California has a budget deficit.

The other measures would have capped government spending, protected education funding, changed the state's lottery and redirected money to children's health programs.

Schwarzenegger had warned that, without budget relief from voters, he would have to take severe steps.

The steps include shortening the school year by a week and a-half, cutting tens of thousands of education jobs, eliminating health insurance for nearly 250,000 needy children, laying off 1,700 state firefighters, and withholding $2 billion from local governments, which could trigger cuts in law enforcement and other services.

Defeat of the provisions also could free 38,000 inmates and force the sale of the famed San Quentin prison.

"If they are non-serious or non-violent, non-sex offenders, we could save in general funds about $53 million in 2009 to 2010," the governor said.

About half the prisoners who might be freed are illegal immigrants, Schwarzenegger said.

"Releasing all the undocumented immigrant prisoners to federal custody could save us another $182 million for 2009 to 2010," he said.

But that plan worries some, including Lance Corcoran of the California Peace Officers' Association.

"The reality is that people don't get to the California prison system by accident, and most of our offenders have nine felony convictions before they have ever seen the inside of the prison," Corcoran said. "There is concern that we are just dumping people back into communities and those communities are going to be at risk." To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
50 years of the Ford Mustang Take a drive down memory lane with our favorite photos of the car through the years. More
Cool cars from the New York Auto Show These are some of the most interesting new models and concept vehicles from the Big Apple's car show. More
8 CEOs who took a pay cut in 2013 Median CEO pay inched up 9% in 2013 to $13.9 million. But not everyone got a bump last year. Here are eight CEOs who missed out. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.