http://www.latimes.com/news/local/la-me-budget21-2009may21,0,3817104.storyReporting from Sacramento -- Gov. Arnold Schwarzenegger and lawmakers scrambled Wednesday to avert a financial meltdown, and public officials across California braced for annihilating cuts on the day after voters trounced their leaders' rescue plan for the state.
Within two hours of returning from Washington, D.C., the governor huddled behind closed doors with Democratic and Republican legislative leaders to grapple with a projected $21.3-billion budget shortfall for the coming fiscal year and stop state government from running out of money by July....
The hacking of government began quickly, by the hand of a little-known state panel that sets elected state officials' pay. Citing a need for shared sacrifice, the group decided to reduce those salaries by 18% starting next year....There was a sense that the warnings this time, unlike some earlier ones, were real -- that state officials had no options left but to deliver devastating cuts that could force Californians to reconcile the desire for programs they have routinely approved by initiative with an insistence on limiting taxes.
"People are going to have to figure out: Do they want schools, do they want roads, do they want public safety, do they want to take care of the less fortunate?" said John Burton, a former state Senate leader who is now chairman of the California Democratic Party. "At some point, that's going to happen."....