California Has a Budget, but Trouble Looms in May
Critics say another crisis looms
By Ambreen Ali,  Newser User
Posted Feb 21, 2009 5:00 AM CST
Arnold Schwarzenegger hands the state budget package to his Legislative Secretary.   (AP Photo/Rich Pedroncelli)
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(Newser) – California's budget fight is officially over. For now. Arnold Schwarzenegger signed into law yesterday a budget package that closes the state's $41 billion shortfall, but not before making $1 billion in line-item trims. The governor cut personnel budgets for state officials by 10%, $400 million in prison funding, and $510 million from higher ed. He plans to replace the education money with federal stimulus funds, reports the San Francisco Chronicle. The bill also includes $12.5 billion in tax increases.

"It's a budget where everyone will have to make certain sacrifices," the governor said. Democrats and Republicans alike are disappointed with the final outcome, with some predicting another crisis as early as May. Californians will vote on six financial measures May 19 that, if rejected, would send the legislature back to the drawing board.