California Governor Schwarzenegger Declares Fiscal Emergency
California governor Arnold Schwarzenegger called a special session with incoming lawmakers and declared a fiscal emergency.
This means that lawmakers have 45 days to find a solution to California’s financial woes, and if they can’t, they cannot legislate on anything else until they do.
Schwarzenegger wants to raise taxes and cut spending to try and lower the state’s $11 billion-deficit. He believes the state will run out of cash in February.
His plan proposes raising the sales tax from 7.25 percent to 8.75 percent for 3 years, raising motor vehicle fees, as well as raising taxes on furniture, appliance and vehicle-repairs, veterinary services, amusement park admissions, tickets to sporting events and golf greens fees.
Each barrel of oil drilled in the states would have a 9.9 percent tax slapped on it, and 5 cents would be added to every alcoholic drink.
Schwarzenegger called another special session so lawmakers could consider a package of stimulus proposals designed to get people back to work, as well as requests for help with the state’s unemployment insurance fund, which could run out of money in 2009. He has proposed cutting the benefits by 5 percent as well as raising what businesses pay in per worker.
Finally, Schwarzenegger wants lawmakers to consider a 90-day stay on home-foreclosures to give people time to modify their loans.