Schwarzenegger declares fiscal emergency

~PressTV

California Governor Arnold Schwarzenegger declares a fiscal emergency as lawmakers failed to pass a budget to close the state’s $ 24.3 billion gap.

The emergency means that the state may start issuing IOU’s instead of checks as soon as Wednesday. Schwarzenegger also ordered state workers to take a third unpaid day of leave every month, to help save the largest state in the US some 1 billion dollars annually.

Schwarzenegger declared the emergency after lawmakers failed to agree on a balanced budget prior to the start of the fiscal year which began on Wednesday morning. The Democratic majority did pass a bill, but Schwarzenegger vetoed it because it contained tax increases and not the roster of cuts and political reform that the former action movie star had advocated.

Schwarzenegger vowed to veto every bill until a budget is passed.

In Washington, White House Spokesman Robert Gibbs said the administration was eyeing California’s crisis but had no plans to intervene. He touted the 144 billion dollars that went to struggling states as part of broader economic stimulus package approved in February.

“There are a number of states that find themselves at the end of the fiscal year and required to pass budgets. We’re certainly watching,” Gibbs said in Washington.