California's new budget already $1 billion in the red

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SACRAMENTO — With state finances deteriorating in sync with the national economy, Gov. Arnold Schwarzenegger and legislative leaders met Wednesday to discuss how to avoid running out of money within weeks — and how to handle a looming multibillion-dollar deficit in the months to follow.

The unusual meeting, coming during the Legislature's annual recess and in the thick of the fall election season, underscored the seriousness of the state's financial outlook. It occurred just two weeks after the governor signed a budget, a time when state spending usually recedes to the background.

Schwarzenegger and the legislative leaders spent much of the afternoon session focused on the immediate problem of how to pay the state's day-to-day bills. Typically at this time of the year, the state obtains short-term loans — known as revenue anticipation notes — to tide itself over until more tax revenue arrives in the spring.

But the frozen national credit market has complicated that borrowing this year. Without an infusion of several billion dollars, the state is on track to run out of money at the end of October.

http://www.mercurynews.com/ci_10672464

Our state is being run by incompetent buffoons.