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United States

Sacramento, Calif.

Finally, a budget: After wrangling for months, the California legislature and Gov. Arnold Schwarzenegger came to terms on a budget this week, agreeing on a framework that would close the state’s $26 billion shortfall. The measure cuts K­–12 education funding by $6 billion, slashes $3 billion from the state’s university system, cuts $1.2 billion from the state’s prison system, and places a ceiling on welfare benefits. Legislators’ options were limited because Schwarzenegger and Republicans refused to consider a budget containing tax increases. The state has been essentially broke since the start of its fiscal year on July 1 and has used hundreds of millions of dollars in IOUs to pay vendors and state employees.

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