California Governor Jerry Brown Declares State of Fiscal Emergency

Gov. Brown Declares State of Fiscal Emergency in CaliforniaGov. Jerry Brown declared a state of fiscal emergency in California on Thursday, a move he made to underscore the need for immediate legislative action to address the state's massive budget deficit.

Brown's declaration reaffirms the fiscal emergency declared by his Republican predecessor, Gov. Arnold Schwarzenegger last month. Brown, a Democrat, was elected to succeed Schwarzenegger in 2010 and assumed the post in January.

In his proclamation, Brown said that "without corrective action" the combined deficit for this year and the next will be $25.4 billion; that revenues are $3.1 billion lower than were projected; and that Proposition 22, which passed in 2010 and restricts how the state can use local taxes, actually created an additional budget shortfall of $1.6 billion. Revenues for the year, he says, will "decline substantially," whereas expenditure will "increase substantially."

Last week, Brown presented a budget that slashes spending by $12.5 billion, including pay cuts for most state employees, and undertakes a "vast and historic" restructuring of government operations. The revenue side of the budget includes extending measures that will have to be first approved by voters. The budget also assumes action on the part of lawmakers by March, including calling for a ballot on the extensions in June.

When Schwarzenegger wanted to act on the budget recently, Democrats in the legislature declined, according to Reuters, preferring to wait and work on it with Brown. Now, Brown needs just a handful of Republican votes to put his measure in front of the voters -- votes that GOP leaders suggest he might not get. But the Democratic leader of the state senate, Darrell Steinberg, is optimistic that the legislature will pass Brown's proposal in time.

Increase your money and finance knowledge from home

Socially Responsible Investing

Invest in companies with a conscience.

View Course »

Economics 101

Intro to economics. But fun.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

At least we have plenty of money to spend in Iraq and Afghanistan building schools, hospitals and apartment buildings, After all , they are much more important than the American people who just whine and complain about being out of work and losing their Homes .....the trivial stuff...

January 24 2011 at 3:32 AM Report abuse +1 rate up rate down Reply

Seems as though some of the states squandered their pension funds and want to make the workers pay for their mistakes now. In New Jersey, this certainly is the case. For the past 15 years, the state of NJ has chosen not to make their lawful contributions to the pension system. The funds were in massive surplus, but were raided by state politicians, re-routed to other causes and now they are gone. This past November, on the ballot in NJ, we actually had for the first time voted to block any more such raids on pension funds. There are abuses in the system. I have seen them personally, but was ignored by the powers that be when I tried to bring them to light. Some people have friends in low places, and so the abuses go on. I paid into the police and firefighters pension system for several years. I chose to take the test. I got hired. I did what was required of me. My pension contributions, like Hyena says, were taken directly out of my paycheck at the rate of 8-1/2% of my gross pay. If you worked a lot of overtime like me, the same percentage was taken from that as well. So, while we are all in a pickle together, I have failed to hear anybody pointing towards the politicians that did not hold up their lawful end of the bargain. I fail to hear the scathing indictments against their raids on otherwise plentiful funds that they depleted while they failed to make their lawful contributions. I am willing to share in some pain like a good American citizen. But I'm afraid I have seen nothing but the demonization of the workers that did everything they were supposed to while politicians drained the funds. Notice what is going on here? They have the people all fighting amongst themselves while they keep running away with all the money, so they can toss it over to their buddies on Wall Street and gamble our lives away. This is true folks.

January 23 2011 at 5:32 PM Report abuse rate up rate down Reply

Hello to all. I have a bit of perspective that you might be interested in hearing. As far as public employee retirement plans are concerned, you may want to be careful what you wish for. If a state were to be able to declare bankruptcy, and does, it could be true that all of those labor contracts can be altered by the bankruptcy courts. This is where it becomes tricky. All those cops and firefighters out there that were promised a retirement per the contract could have their benefits reduced drastically. Okay you say? This is where the bad news for you comes. Those contracts that you all want ripped up, they are the only things compelling let's say, a police officer or firefighter, not to strike. I can promise you this. If this goes down per your requests, they will. You see, there will be no contractual obligation for them not to strike once you have your way. And if a home invader comes to your house, the police won't be there to help you. If your house catches fire, and you and your families are trapped inside, there won't be a firefighter there to rescue you. Think this through because for every action, there is an equal and opposite reaction. You want to reduce the reward incentives for the dangers police and fire workers must face, you could find yourself in need of them and they won't be there to help you. Enjoy your tax money.

January 23 2011 at 2:54 PM Report abuse rate up rate down Reply
1 reply to hyenachaser's comment

Well, technically, they couldn't say they are on strike due to the law. How about if they just stop caring, call out sick in large numbers, cease to write as many tickets that hurt their community budgets? Just remember, there is more than one way to cripple operations without calling it a strike. This is the entrance way to insanity and chaos. Maybe some of you wanted to get into public service, but couldn't pass the tests. Perhaps, you just don't have what is necessary to enter a burning building to rescue some people, or you don't measure up to dealing with criminals. I chose a law enforcement career for my pension and benefits. I spent a career spilling my blood, sweat and tears to get what I have now. I paid 8 1/2% of my salary for several years toward my pension. So, just because most of you fall short of what you need to land a job of this caliber doesn't mean that I did. Funny, without the police and firefighters, you would be lining up in 2 months time to give them pensions.

January 23 2011 at 3:26 PM Report abuse rate up rate down Reply

Illegal immigration is the culprit

January 21 2011 at 1:43 PM Report abuse +3 rate up rate down Reply
1 reply to fh1939's comment

California has far too many nuts - from the bottom to the top. The elite have made it nearly impossible for anyone to afford living in the state.

January 21 2011 at 12:24 PM Report abuse +3 rate up rate down Reply
1 reply to vobox3343's comment

California, as well as other PC liberal States need to realize that you cannot continue to fund every request from welfare organizations, illegals, santuary cities, etc, etc on the backs of businesses and taxpayers and not go broke.

January 21 2011 at 11:57 AM Report abuse +4 rate up rate down Reply
1 reply to jnaylor284's comment

Republican Gov. Swartzy didn't get the memo, I take it?

January 21 2011 at 12:25 PM Report abuse +1 rate up rate down Reply

Between 2005 and 2009, the state added 500,000 employee's. The legislature which the people elected over the past 10 years have absolutely destroyed the state. Unless the legislature changes, the governor who ever it is, can't do much!

January 21 2011 at 11:56 AM Report abuse +4 rate up rate down Reply
Stop Darrell Issa

Very very difficult job, but this is the man for the job. He will get the budget to where it has to be.

January 21 2011 at 11:10 AM Report abuse -1 rate up rate down Reply

Welcome to the Governorship, Mr. Brown. It is good to see that you have quickly discovered that you are no longer in Kansas with Dorothy, the Tin Man, the Scarecrow, and the Wicked Witch. I personally doubt that you will be able to put the Golden State on a sound fiscal basis, after so many years of malfeasance by Governors and Legislators, of both parties. In my opinion, your only chance is to somhow persuade the Federal government to bail you out (perhaps by having the Federal Reserve assume your pension obligations). Short of that, maybe you could secede from the Union and petition China to take you in. Good luck!

January 21 2011 at 11:06 AM Report abuse +1 rate up rate down Reply
Stop Darrell Issa

California is one of the greatest places in the world. It has had an incredibly vibrant economy, created millions of jobs over the last 50 years and is just a fabulous place. It is not liberal policies that hurt CA budget but all the stupid propositions that tie the hands of California's politicians and so they can not have any kind of reasonable debate

January 21 2011 at 10:41 AM Report abuse -3 rate up rate down Reply
2 replies to Stop Darrell Issa's comment

My home state is a nut case. California gets what it deserves! Whatever happened to you must have a balanced budget? How and when did they change the rules allowing the state to borrow to balance their budget? Highest monthly welfare benefits in the U.S., second highest taxes, way to many state employees, state pension and health care plan that can not possibly be paid. Get a grip on it!

January 21 2011 at 11:50 AM Report abuse +5 rate up rate down Reply

Dream on. So, the lack of reasonable debate is the probem? How about spending the taxpayers and businesses money on things you can't afford. Liberals just don't know how to manage money very well.

January 21 2011 at 12:00 PM Report abuse +3 rate up rate down Reply