In the recall election against Gray Davis, Arnold Schwarzenegger promised to end the annual budget crisis once and for all. But once again this year there's no state budget, and the revenue shortfall is $15 billion. Schwarzenegger's public opinion rating has dropped to 40% and the legislature's is much lower than that. Now Schwarzenegger says he's cutting the salaries of state workers—down to the federal minimum wage.
FROM THIS EPISODE
It's more than three weeks into the new fiscal year, but the state legislature with Democrats in the majority has not passed a budget. Failure to meet the constitutional deadline is nothing new, but this year there's a revenue shortfall of $15 billion. Governor Schwarzenegger says it's too expensive to borrow the money to keep going, so he has a proposal to defer a billion dollars in spending a month: cut the pay of some 200,000 state workers down to the federal minimum wage. They'd have to get by on $6.55 an hour until the budget was passed.