2
July
Arnold Schwarzenegger declares fiscal emergency in California
2 July 2009 The Telegraph
Arnold Schwarzenegger, the governor of California, has formally declared a fiscal emergency in the state and called state legislators back into a special session to close a budget deficit expected to reach $24bn over the next two years.
The move came as America's largest state, which has a $2.8bn cash shortage, said it would not be able to pay some of its bills as of Thursday. Instead, it will issue IOUs to its largest creditors.
Mr Schwarzenegger said that the cash shortage will grow to $6.5bn by September unless the state legislature makes huge cuts in services ranging from education to poverty programs.
