After many months of heated debate, California legislature finally reached a deal to close the state's overwhelming budget gap of $26 billion dollars. The package still needs to be brought to a final vote, which is expected at the conclusion of this week.
Gov. Arnold Schwarzenegger was quoted by the AP as saying there would be no new taxes imposed on the state's residents. Instead, the gap will be filled with a combination of $15 billion in cuts, picking up the pace in collecting certain outstanding tax debts and creative book-keeping utilizing borrowing and moving funds from other government accounts.
The goal is that the politicians would meet again Thursday, and pass the new budget that would release the necessary funds to all government agencies. Once this is established California can cease issuing IOU's and build back their relationship with creditors. California currently has the worst credit rating of any state in the nation.
*Are you a California resident? How have budget cuts affected you? Things will not get any easier for California for a while, so it's best to open up a good savings account and be prepared.*
