California On The Brink of Bankruptcy

From the LA Times:

Gov. Arnold Schwarzenegger this morning ordered state workers to take a third day off without pay each month after Republican lawmakers acting with his support blocked a Democratic proposal to ease the state’s deficit and allow the government to keep paying bills.
The Republican governor unveiled billions of dollars in additional proposed cuts to schools and public universities to deal with a deficit that he says is now $26.3 billion, an increase of $2 billion. He also announced an emergency special session of the Legislature that would allow lawmakers to act on them immediately. [...] ]If lawmakers and the governor do not agree on a plan to wipe out the deficit — or at least part of it — by the end of today, State Controller John Chiang will begin giving out IOUs in lieu of checks to pay debts owed by the state.
“We have one more day,” Senate President Pro Tem Darrell Steinberg (D-Sacramento) said as his house prepared to convene again.[...]

The state will be handing out IOU’s to the contractors and citizens if a budget agreement isn’t reached. If a budget agreement is reached tonight by midnight you can still expect budget cuts and increased taxes for the California residents…look back here when we called it.

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