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With pension costs devouring San Jose's budget and many employee unions balking at reducing their perks, San Jose Mayor Chuck Reed on Friday unofficially declared what is believed to be the city's first fiscal state of emergency and said he will take his case to the voters in November. ....A big hang-up is whether the city can change retirement benefits for current employees, something officials in San Jose and other governments say is essential to stabilize costs. Unions argue that constitutional protections for public employees mean their pensions can't be reduced because they are "vested rights." Reed and other officials...

SAN FRANCISCO (Reuters) – California Governor Jerry Brown declared a state of fiscal emergency on Thursday for the government of the most populous U.S. state to press lawmakers to tackle its $25.4 billion budget gap. Democrat Brown's declaration follows a similar one made last month by his predecessor, former Republican Governor Arnold Schwarzenegger. Democrats who control the legislature declined to act on Schwarzenegger's declaration, saying they would instead wait to work on budget matters with Brown, who served two terms as California's governor in the 1970s and 1980s. Brown was sworn in to his third term early this month and...

With even well-managed counties, cities and schools finding themselves in the same budget hole that has swallowed state government, California now confronts a financial crisis that may be unrivaled — though it is also maddeningly difficult to quantify. So just how broke is California? California's collective deficit may be double the state government's $20 billion budget gap. Now consider that California has 58 counties, 480 or so cities and nearly 1,000 school districts — plus dozens more special districts, like transit agencies and water boards. Amid California's harshest slump since the Great Depression, officials from one end of the state...

Gov. Arnold Schwarzenegger asked lawmakers to blow up the boxes of government, and on Wednesday they obliged -- though not exactly as he envisioned. A legislative budget committee delayed action on many of Schwarzenegger's proposals for cutting waste, and instead took an ax to operations managed by the governor. They voted to get rid of entire departments and agencies under his authority. The committee voted to eliminate the Secretary of Education office, an appointed position that exists to help the governor on school issues. Lawmakers declared that the governor does not need such an office, as it overlaps with the...

California Reaches Budget Deal, With Billions Cut JENNIFER STEINHAUER July 20, 2009 LOS ANGELES — California lawmakers, their state broke and its credit rating shot, finally sealed the deal with the governor Monday night on a plan to close a $26 billion budget gap. The plan, which is certain to be viewed with trepidation among legislatures across the country also facing huge budget gaps, distributes pain through nearly every aspect of government services. While the Legislature pushed back on Gov. Arnold Schwarzenegger’s proposal to eliminate health care programs for children and the state’s generous welfare program, both took large cuts....

LOS ANGELES — Direct democracy has once again upended California — enough so that the state may finally consider another way by overhauling its Constitution for the first time in 130 years. Gov. Arnold Schwarzenegger returned home from a White House visit on Wednesday to find the state dangerously broke, his constituents defiant after a special election on Tuesday and calls for a constitutional convention — six months ago little more than a wonkish whisper — a cacophony.

SACRAMENTO – California's budget picture has deteriorated significantly since the summer amid a slumping housing market and slowing economy, leading to a nearly $10 billion revenue shortfall, the state's legislative analyst said Wednesday. Without immediate spending cuts or other fixes, the state's $4.1 billion reserve will evaporate. California will be nearly $2 billion in the red by the time lawmakers vote on a new budget next summer, according to the analyst's report. In addition, the shortfall for the budget year that will begin next July has mushroomed by more than 50 percent, leading to the combined $10 billion shortfall for...

1:58 AM PST Reporting from Sacramento -- Aiming to end a three-month impassse, the California Senate prepared to vote early this morning on a deal Democrats and Gov. Arnold Schwarzenegger reached with a GOP holdout to resolve the state's fiscal emergency. Under the deal, Sen. Abel Maldonado of Santa Maria agreed to provide the final Republican vote needed to pass a spending plan with billions of dollars in tax hikes. In exchange, Democrats would rewrite election rules that Maldonado says are stacked against moderates like himself. (snip) Throughout the day, negotiators stayed focused on Maldonado and GOP Sen. Dave Cox...

Mayor Swearengin Declares Fiscal Emergency, Delivers Plan to Deal with Budget Shortfall 05/03/2010Mayor Ashley Swearengin today declared a fiscal emergency for the City of Fresno and released a proposed fiscal year 2011 budget that offers a three-pronged plan to address the City’s Fresno’s $30.6 million revenue shortfall. Mayor Swearengin said the fiscal emergency declaration, which will be presented to City Council Thursday for approval, is necessary to allow the City to use its emergency reserves to help meet the daunting budget challenges by paying for one-time expenses related to budget cuts. The proposed $213.2 million general fund budget takes...

SAN FRANCISCO (Reuters) – Increasing pressure on lawmakers to negotiate a state budget that closes a $19 billion shortfall, California Governor Arnold Schwarzenegger declared a state of emergency over the state's finances on Wednesday. In the declaration, Schwarzenegger ordered three furlough days per month beginning in August for thousands of state employees to preserve the state's cash to pay the state's debt obligations and for essential services. California's budget is several weeks overdue and Schwarzenegger and top lawmakers are at impasse over how to balance the state's books.

Local Government Fiscal Emergency: Fresno, CA Edward Harrison May. 4, 2010, 5:07 PM(This guest post previously appeared at the author's blog, Credit Writedowns) Tax revenue at state and local governments has plummeted. With house prices in California down substantially, it is even more dire for municipalities there. The result will be widespread budget cuts and, where possible, income tax hikes. Budget cuts alone won’t get you there. Below is one specific example in Fresno, California. They are taking money from their reserve fund to make ends meet. That is not sustainable. They are an example of the fiscal emergency coming...

Regulation: Ignoring the first rule of holes, a bankrupt state passing out IOUs welcomes an EPA waiver allowing it to further kill its economy. Too bad the state can't stop the air pollution imported from a growing China. The U.S. Environmental Protection Agency on Tuesday granted California its long-standing request — denied by the Bush administration — for a waiver to allow it to impose even more stringent air pollution rules than currently required by the federal government.The way is now clear for implementation of a 2002 state law requiring new cars to increase their fuel economy 40% by 2016....

SACRAMENTO – Gov. Arnold Schwarzenegger has declared a fiscal emergency to address California's deficit and has ordered state offices closed three days a month to save cash. The Legislature will have 45 days to send him a plan to balance the state's budget, which ended the fiscal year with a $24.3 billion deficit. The shortfall is expected to grow by $7 billion because the Legislature did not enact several stopgap measures Tuesday. If lawmakers fail to act within the 45 days, they cannot adjourn or act on other bills until they solve the crisis.

Villaraigosa calls on City Council to declare a fiscal emergency In light of L.A.'s $529-million budget deficit, the mayor seeks the authority to layoff and furlough thousands of city workers. The council is to consider the matter later this week. By Phil Willon May 12, 2009 With Los Angeles facing a $529-million budget deficit, Mayor Antonio Villaraigosa on Tuesday urged the City Council to declare a fiscal emergency that would grant him the authority to layoff and furlough thousands of city workers. The request signals a more hard-line tack by the mayor to win salary and benefit concessions from the...

(12-01) 16:38 PST Sacramento, CA (AP) -- Gov. Arnold Schwarzenegger declared a fiscal emergency on Monday and called lawmakers into a special budget session, warning that California was in danger of running out of daily operating cash within two months. The special session will force the new Legislature to get to work immediately and figure out a way to solve the $11.2 billion budget deficit in the current fiscal year. The governor's declaration came just days after a previous special session with the outgoing class of lawmakers failed to produce a compromise. Unless budget corrections are made quickly, the state...

California could become the first state in the American union to go broke after Governor Arnold Schwarzenegger warned it is heading for a "fiscal disaster" as a result of the global financial crisis.Mr Schwarzenegger has declared California to be in a fiscal emergency and called for the state's politicians to work together in a special legislative session to reduce its growing $11bn (£7.4bn) deficit. That deficit is projected to grow to $28bn over the next 18 months, and the Republican Governor wants politicians from all sides of the divide to work together in order to ensure the state does not...

Sacramento, CA (AP) -- Gov. Arnold Schwarzenegger was expected to declare a fiscal emergency on Monday and call lawmakers into a special session to address California's $11.2 billion budget deficit. California's revenue gap is expected to hit $28 billion over the next 19 months unless the governor and lawmakers take bold steps. Schwarzenegger and Democrats have proposed a combination of tax hikes and spending cuts, but Republican lawmakers have remained steadfast in their refusal to raise taxes. Unless budget corrections are made quickly, the state is likely to run out of cash in February. Lawmakers failed to reach a compromise...

SACRAMENTO -- Gov. Arnold Schwarzenegger said today he plans to declare a fiscal emergency next month in the face of a $14 billion budget shortfall, clearing the way for his administration and lawmakers to make immediate mid-year spending cuts in state services. The governor, during a speech about health care in Long Beach, said the fiscal pain would be spread "across the board" but that passage of a long-awaited, health-care reform plan in the meantime would ease impacts on the poor who depend on Medi-Cal, government-subsidized health insurance. "We are going to call this January for a fiscal emergency when...