Gov. Arnold Schwarzenegger unveiled an $82.9 billion state spending plan today that calls for no tax hikes but envisions pay cuts for state workers, reductions in services to California's neediest residents - and on the benevolence of the federal government.
The governor also declared yet another fiscal emergency, and called for yet another special session of the Legislature, designed to keep a projected $19.9 billion budget deficit from growing by another $2.4 billion.
"We must begin our work immediately," Schwarzenegger said in his message to legislators. "If we fail to take action in the special session that I have called, our problem will only grow, and the decisions that will be required to make up for lost savings will grow even more difficult than those now before us."
Under Schwarzenegger's proposed budget for the fiscal year that begins July 1:
Overall, state spending on day-to-day operations would drop from $86.1 billion in the current fiscal year to $82.9 billion, a 3.7 percent drop, and well below growth in the state's population. The proposed budget also reflects a 19 percent drop from three years ago.
The governor's proposals mark the first formal shots in what has become an almost-continuous struggle by the state's elected officials to balance recession-ravaged tax revenues with increasing demands for spending. Last year, Schwarzenegger and lawmakers closed a budget gap of more than $60 billion through tax increases, deep spending cuts, various accounting tricks and one-time band aids.