Schwarzenegger: Budget special session is needed

By: STEVE LAWRENCE, Associated Press Writer
By: STEVE LAWRENCE, Associated Press Writer
SACRAMENTO, Calif. – The revenue shortfall in California

California Gov. Arnold Schwarzenegger presents his State Budget plan during a news conference in Sacramento, Calif., on Thursday, Jan. 10, 2007.(AP Photo/Steve Yeater)

SACRAMENTO, Calif. – The revenue shortfall in California's five-week-old budget has grown beyond the $3 billion projected by state officials earlier this month, Gov. Arnold Schwarzenegger said Monday.

He said he would issue a proclamation for the lame-duck Legislature to convene after the election to address the budget gap, the housing crisis and find ways to stimulate the economy.

"I think it's very important that right after the election that we go and have the special session and have the Legislature deal with this crisis as quickly as possible because it's much bigger than we knew just a month ago," he said after meeting with legislative leaders.

Schwarzenegger signed the most overdue budget in state history on Sept. 23, one that closed a $15.2 billion deficit by making $7.1 billion in cuts, accelerating some tax collections and implementing a variety of accounting gimmicks.

Since then, the economic decline nationally and statewide has become more pronounced.

Schwarzenegger said he would issue the proclamation Nov. 5 and state Sen. Darrell Steinberg, the Sacramento Democrat who is line to become the Senate's new leader, said lawmakers would convene within a few days after that.

"It's going to be a miserable November for all of us," said current Senate President Pro Tem Don Perata.

The Republican governor said he didn't know exactly how much larger the shortfall had become, but that it was "much more" than the $3 billion gap earlier projected.

The budget was delayed this summer because Democratic and Republican lawmakers couldn't agree on whether to raise taxes to help eliminate the deficit. Perata said the subject of tax increases didn't come up during Monday's meeting in the governor's office.

Assembly Speaker Karen Bass, a Los Angeles Democrat, said lawmakers face a far more serious situation now, which would force them to reach some sort of accord, unlike the partisan disagreements that delayed passage of the budget.

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