Californian Governor Arnold Schwarzenegger said Wednesday that the state's budget deficit has grown by 3.6 billion U.S. dollars.
The governor warned that the most populous state in the nation is headed toward a "financial Armageddon" and will be out of cash by February if legislators continue their standoff over the budget deficit.
Schwarzenegger said the state's financial crisis has worsened substantially in recent weeks, with the projected budget deficit growing by another 3.6 billion dollars to reach 14.8 billion dollars in the current fiscal year ending in June, up from an earlier estimate of 11.2 billion dollars.
The news from the governor, delivered in a hastily arranged press conference in the state capital Sacramento comes as lawmakers have yet to address the problem in emergency sessions of the state legislature.
The governor said the state may be forced to cut off 5 billion dollars of construction funding for roads, schools and other infrastructure projects this month if no budget is adopted.
Over the next 18 months, the gap between tax revenue and spending will exceed 30 billion dollars unless action is taken to cut programs and raise taxes, the governor said.
"What's amazing is that the legislators continue to act as if there's a $30 billion surplus," Schwarzenegger said.
"When you have a crisis the most important thing is to make a decision," he said. "The worst thing is not to make a decision. The most costly thing we can do is not to take any action."
The main sticking point in budget negotiations remains taxes, which take a two-thirds vote in both houses of the legislature, and thus some Republican support, to raise.
Republican leaders say they will not consider tax hikes before the governor and Democrats agree to a list of conditions, such as enacting a strict spending cap, relaxing overtime and environmental rules for businesses and making deep cuts to health and social service programs.
Source: Xinhua
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