Calif. Controller Discusses Budget Crisis in Fresno | ABC30 Fresno

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By ABC30

Tuesday, January 27, 2009

Fresno, CA, USA Visiting the Fresno Rotary Club for the first time, California State Controller John Chiang didn't hold back. "If you think the tax increases they're talking about are stiff, or if you think the spending cuts they talk about today are drastic, you have not seen anything yet," said Chiang.

Chiang says the state's $42 billion dollar deficit is growing bigger by the day. In large part because state lawmakers still haven't finalized the budget. Governor Schwarzenegger addressed the problem, but remained tight-lipped on any details. "We are getting closer and closer to solve this problem and to solve our budget," said Schwarzenegger.

Chiang says if the budget issues are not resolved, the state will run out of cash by February 27th. If that happens, the state could default. "That would be the worst thing that happens. People won't lend us any money. We'll have greater spending cuts because we won't have the availability of money," said Chiang.

Those cuts will no doubt affect people here in the Valley. Fresno State has already cut freshman enrollment because of state funding issues. County officials say programs across the board are facing more cuts, if not elimination.

And County employees could soon receive payment in the form of IOU's. Fresno County Supervisor, Phil Larson says, "It affects everybody. 7,000 workers in Fresno County. We'll be notifying the vendors that there's no money to pay them. It could shut the county down."

At Tuesday's Fresno County Board of Supervisors meeting, they will be discussing an emergency plan to deal with the state's budget issues. A plan that will include barrowing money from funds and possibly deferring payments to the state.

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