California Budget Crisis May Lead to 20,000 Layoffs

By Diane Smith
14:02, February 17th 2009
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California Budget Crisis May Lead to 20,000 Layoffs

The $42 billion deficit California is facing may leave officials with no other alternative than to notify as many as 20,000 state workers that they may lose their jobs in a few months.

The announcement was made by a spokesman for California Governor Arnold Schwarzenegger after the state lawmakers didn’t succeed to approve a $40 billion budget. Negotiations were stalled after a 30-hour weekend session.

Meanwhile, lawmakers were told to prepare for a long day Tuesday to pass the budget.

"Bring a toothbrush, bring any necessities you want to bring, because I will not allow anyone to go home to resume their lives ... as long as we know ... that 20,000 people will be laid off," Senate President Pro Tem Darrell Steinberg told members of the Senate.

The deadline was set on Monday, but the lawmakers failed to approve the budget. This prompted Gov. Schwarzenegger, who declared a fiscal emergency in December, to issue layoff notices. The layoffs would be carried out in June to get ready for the next fiscal year which starts in July.

Schwarzenegger’s decision is practically all he can and must do as the state governor. In the absence of a budget, the governor must make state savings any way he can and cutting 20,000 jobs would save California $750 million for the year.

California, the world’s eighth biggest economy, is struggling to cope with the housing crisis, high unemployment rates and low consumer spending. The state has already laid off state workers for two days a month.



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