SACRAMENTO, Calif. — States from coast to coast began a new fiscal year Wednesday with no budget plans and with cash quickly running out, sending some to the brink of shutdown and forcing others to furlough workers and cut services.
In California, Gov. Arnold Schwarzenegger declared a fiscal emergency and ordered state offices closed three days a month to save money as the state sank deeper into dysfunction. State officials plan to pay bills with IOUs starting today.
But the pain extends far beyond the West Coast. The governor of Pennsylvania is proposing a 16 percent tax increase. A budget veto by the Illinois governor left the state with no spending plan at all. Indiana barely avoided a shutdown.
In most states, the debate centers on whether taxes should be raised to bridge the budget gaps.
Schwarzenegger said he wouldn’t sign anything that raised taxes or fees beyond what he has already proposed.
“I’m proud of California, even though we have our crisis,” the governor said. “No one can point fingers, because as you can see, there are 30 states right now that have their fiscal year starting today that also don’t have a budget, so I mean let’s not get carried away and just look at California as we are the only state that cannot manage the budget.”
The mess in California could spread nationwide because of the sheer size of the state economy. The Senate rejected three bills designed to save $5 billion, including $3.3 billion in education funding cuts that had to be enacted before Wednesday. Schwarzenegger has pegged the size of the budget gap at $26.3 billion.
