SAN FRANCISCO (Reuters) - California Governor Arnold Schwarzenegger will update his plan for "draconian" budget cuts on Friday after four months of legislative debate failed to close a hole last calculated at $20 billion.
The state's credit ratings, only a few notches above "junk" status, are under pressure, and April personal income tax revenue was below target, exacerbating the financial problem for the most populous U.S. state.
Health and welfare programs are expected to bear the brunt of cuts, teachers are expected to lose jobs and cities are seen being forced to hand over revenue. Schwarzenegger has ruled out tax increases urged by Democrats who control the legislature.
Legislators have changed financial rules to ease a cash-flow crunch, and investors have snapped up recent bond offerings, but California's fiscal future is cloudy.
Better late then never I suppose.
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