On Wednesday the California legislature rejected a proposed budget with $11 billion of cuts. California faces a $24 billion deficit.
Democrats say they won’t vote for a budget which “cuts the safety net.” Republicans won’t vote for a budget with tax increases. A budget requires a 2/3 vote; a few Republicans must vote for it. Governor Schwarzenegger has said he won’t sign a budget with any tax increases.
Welcome to the unstoppable force meeting the immovable object.
The people of California spoke in May: No more tax increases, no more gimmicks, just give us a budget which lives within our means. California’s controller has said that IOUs will be issued beginning next week unless a compromise is reached. I don’t think one will come quickly.