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California Lawmakers Agree on Plan to Close Budget Deficit

By The Associated Press — February 23, 2009 1 min read
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California lawmakers last week approved a plan to close a $42 billion budget deficit after an epic impasse that involved several all-night sessions as the state hovered on the brink of economic disaster.

Deep cuts were still expected to education, health care, social services, and programs that help the poor get off government benefits. The state’s budget for fiscal 2009 is $119 billion.

Gov. Arnold Schwarzenegger praised the effort to forge a compromise on the package of bills that raises taxes and cuts spending in the world’s eighth-largest economy. Lawmakers in his own Republican Party had held up the legislation over their opposition to tax increases.

Both houses of the legislature got the bare minimum of votes to reach the two-thirds requirement needed to pass the package, which includes $12.8 billion in tax hikes, $15.1 billion in cuts, billions in borrowing and measures intended to stimulate the state’s economy.

If the economy doesn’t significantly worsen, the plan is intended to balance the state’s budget through June 2010.

A version of this article appeared in the February 25, 2009 edition of Education Week

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