State Lawmakers Confident over Budget Deal

January 27, 2009 12:00:00 AM PST
The governor said there might be a new budget deal within the next few days but isn't discussing the details.Governor Schwarzenegger and legislative leaders resumed budget talks yesterday on how to close the state's $40-billion dollar budget gap. Legislative leaders said they are keeping details a secret because they don't want to derail budget negotiations.

Schwarzenegger and lawmakers have little time left to strike a deal.

State controller, John Chiang criticized the slow budget process during his visit to the Valley. He spoke to the Fresno Rotary Club Tuesday.

Chiang said if there is no budget by February first, he will have to impose a 30-day delay on tax refunds and other payments because of a cash shortage. The state would be forced to use IOU's which could mean state and county workers don't get paid.

"The unemployment numbers are very high in the Central Valley. People are really struggling and suffering. If we have to do the cash deferrals, if we get in a position where it gets worse and we have to issue IOU's, more families are going to be hurt," said California State Controller John Chiang.

On February 6th, state employees will have to take two days off a month without pay.

California has started borrowing from a federal fund so it can continue paying unemployment insurance benefits. The Employment Development Department estimates it needs nearly $2.5 billion dollars from the federal fund to keep its unemployment program solvent through the end of the year.

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