financial crises forces california to face ...

Reality. Finally a real attempt to fix the problem - spend less, pay more.


LOS ANGELES (Reuters) - California lawmakers began voting late Saturday on plans to raise taxes and cut spending to close a $42 billion budget deficit the state's government faces over the next 17 months.

Falling revenue in the prolonged housing downturn and a slumping economy worsened by Wall Street's recent turmoil have pushed the most populous state further into the red.

The legislation put to the vote in the state capital of Sacramento would balance California's books with $15.1 billion in spending cuts, $14.4 billion in new revenue and $11.4 billion in borrowing. The budget, which extends through June 30, 2010, also has a reserve fund of $1.3 billion.