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GOVERNOR DAVIS FREEZES $2 BILLION IN SPENDING Nov 16, 2001
Governor Davis, in a response to the state's detoriating fiscal situation, ordered today (Wednesday late afternoon) an immediate freeze in $2 billion in state spending impacting hundreds of programs in nearly every state agency. The Governor announced he will call a special session of the state Legislature (now in recess) in January to approve the specific cuts in current state spending that his Administration is proposing.
The Governor's freeze and proposed spending cuts for THIS year's budget (which began July 1 and will end June 30, 2002) do not come close to closing the $4.5 billion deficit that is predicted this year - or the nearly $8 billion shortfall for the 2002-2003 budget year(which begins July 1, 2002).
As previously reported, the California Legislative Analyst's Office (LAO) is now predicting that California will end the CURRENT fiscal year (that began July 1 and ends June 30, 2002) with a huge shortfall of $6.8 billion, wiping out the $2.6 billion reserve, and pushing the state into a staggering deficit of $4.5 billion, in a report released early Wednesday morning to the Legislature. The LAO, an independent non-partisan office that reports to the state Legislature, now projects that the 2002-2003 budget year (which begins next July 1) will face at least a $12.4 billion shortfall (including the 4.5 billion deficit from this budget year). The LAO also reported the sharpest decline in annual state revenues (12%) since World War II.
Specific details on all the cuts the Governoris proposing are not yet available - but they do include at least $30 million inone-time projects requested by various legislators (sometimes referred to as "pork"). The Governor is still resisting tax increases as a means to bridge the shortfall.
IMPACT ON PEOPLE WITH DEVELOPMENTAL DISABILITIES
Specific details on all the cuts the Governoris proposing are not yet available, so it is not clear yet how these cuts will impact regional centers, developmental centers and community services and supports. Education is taking a huge portion of the hit, but with the exception of law enforcement, every department is facing the freeze and cuts in current year spending.
NEXT STEPS * GOVERNOR'S PROPOSED BUDGET - He will present, as normal in January to the Legislature (regular session) and also his proposed spending cuts to THIS year's budget (for the special session that will run concurrently with the regular session). This will be the first confirmation of how severe the cuts (and any tax increases) will be.
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