Calif. Budget Gap Could Mean IOUs, Not Tax Refunds

(NEWSER) - Arnold Schwarzenegger has proposed cutting a week out of the public school calendar, the latest desperate measure in California's struggle with a $41 billion budget shortfall. The Governator says the $1.1 billion savings will ward off other cuts to education, which makes up 40% of the state budget. Schools would close early or find money to finish the 180-day year, raising fairness concerns, reports the Los Angeles Times. More»

(NEWSER) - Just how bad has California’s budget crisis gotten? So bad that it’s holding what it’s calling the “Great California Garage Sale” this weekend, hoping to unload piles of junk and wasteful property that the state’s accrued over the years. Hundreds of items will be available, from BlackBerrys to desks to cars and CHiPs motorcycles. Arnold Schwarzenegger has even signed some of the items to drum up interest. More»

(NEWSER) - After joining other major banks in snubbing cash-strapped California last month, JPMorgan Chase has changed tack and is lending the state $1.5 billion to end its IOU program a month early. The short-term loan will enable California to start redeeming on Sept. 4 the IOUs it has been using since July to pay vendors and creditors, the LA Times reports. More»

(NEWSER) - A plan to slash the number of inmates by 27,000 could sink California's long-delayed budget deal, the Los Angeles Times reports. Angry Republican state lawmakers threatened to back out of the agreement after learning of the plan, which would give prison officials authority to let any inmate over 60 years old or with less than a year left on their sentences finish their time on home detention to save money. More»

Plan calls for massive cuts to close $26B budget hole

(NEWSER) - After weeks of wrangling, Gov. Arnold Schwarzenegger has made a deal with state lawmakers to close the $26 billion hole in California's budget, the Sacramento Bee reports. Leaders believe the plan—which involves massive spending cuts and borrowing from city governments—is solid enough to secure billions of dollars in short-term loans, allowing the state to stop issuing emergency IOUs. More»