Report: Calif. faces another $8B budget gap

March 13, 2009 10:25:01 AM PDT
The recession has created another $8 billion hole in California's budget, the Legislature's budget analyst says in a new report. Despite a budget deal last month that was meant to close a $42 billion deficit, the Legislative Analyst's Office projected Friday that state leaders will have to find new solutions as state revenues continue to fall.

The report says the additional gap will be $6 billion in the new fiscal year that starts July 1, plus $2 billion that is needed for a cash reserve.

Unless Gov. Arnold Schwarzenegger and lawmakers take action, analyst Mac Taylor says the deficit will grow to $12.6 billion in 2010-11.

Taylor is recommending the state save as much federal stimulus money as possible.

(Copyright 2009 by The Associated Press. All Rights Reserved.)

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