01/11/2008 Print Version
WHEREAS at the time the 2007 Budget Act was enacted it reflected budget reserves for Fiscal Year 2007-08 totaling $4.1 billion; and
WHEREAS at that same time, as a result of spending requirements embedded in law and increased program costs as a result of inflation, caseload and population driven program growth, the Department of Finance projected shortfall between revenues and expenditures in Fiscal Year 2008-09 would be $6.1 billion; and
WHEREAS since the enactment of the 2007 Budget Act, the California economy, though remaining strong in general, has faced the same challenges that are affecting the rest of the nation, in large part as a result of a slowing housing market and higher energy prices; and
WHEREAS these economic challenges have resulted a $4.8 billion reduction in the General Fund revenue forecast for Fiscal Year 2007-08 below the revenue forecast used when the 2007 Budget Act was enacted, including a $665 million reduction in the receipt of General Fund revenues through December 2007; and
WHEREAS costs payable from the General Fund during Fiscal Year 2007-08 are anticipated to increase by $1.9 billion over expenses budgeted for Fiscal Year 2007-08, largely as a result of the cost of fighting extraordinary wildfires in Southern California, lower property tax revenues to offset state participation in school funding and court ordered payments for state programs; and
WHEREAS the Department of Finance now reports that this combination of lowered revenue receipts and projections and increased costs has resulted in a projected budget shortfall for Fiscal Year 2007-08 of $3.3 billion as well as a cumulative budget shortfall in Fiscal Year 2008-09 of $14.5 billion; and
WHEREAS the Department of Finance further reports that there is now expected to be insufficient cash reserves for Fiscal Year 2007-08 as well as for Fiscal Year 2008-09 and possibly insufficient cash to make currently anticipated payments in Fiscal Year 2008-09; and
NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, in accordance with Section 10(f) of Article IV of the Constitution of the State of California, HEREBY DETERMINE that General Fund revenues for Fiscal Year 2007-08 will decline substantially below the estimate of General Fund revenues upon which the 2007 Budget Bill was based.
I, ARNOLD SCHWARZENEGGER, Governor of the State of California, HEREBY DECLARE that a fiscal emergency exists.
I, ARNOLD SCHWARZENEGGER, Governor of the State of California, HEREBY IDENTIFY THE NATURE OF THIS FISCAL EMERGENCY to be the projected budget imbalance and insufficient cash reserves for Fiscal Year 2007-08 and the projected insufficient cash reserves and potential budgetary and cash deficit in Fiscal Year 2008-09 which are anticipated to result from the lower than estimated General Fund revenues in Fiscal Year 2007-08 and increased Fiscal Year 2007-08 expenditures.
FURTHER, on this day, as required by Section10(f) of Article IV of the Constitution of the State of California, I will cause the Legislature to assemble in special session to address this fiscal emergency, and I will submit to the Legislature proposed legislation to address this fiscal emergency.
IN WITNESS WHEREOF I have hereunto set my hand
and caused the Great Seal of the
State of California
to be affixed this 10th day
of January, 2008.
_________
ARNOLD SCHWARZENEGGER
Governor of California
ATTEST:
_________
DEBRA BOWEN
Secretary of State
