Fiscal Emergency Declared in California, Washington; So What's Next?

(Dec. 6) -- Things aren't so pretty out West.

In a one-two punch of bad economic news, the governors of both California and Washington declared their states to be in a state of fiscal emergency and have called for their respective legislatures to hold a special session to deal with the ongoing problem.

In both states, when an emergency session of the legislature is called, the governing body must concentrate solely on the issue at hand, rather than turn its attention elsewhere. So what options lie ahead for these two Pacific Rim states as each attempts to retailor its budget priorities? Surge Desk has a brief primer.

California
Arnold Schwarzenegger said Monday that California faces a $6 billion deficit, and the governor seems intent on making the poor bear the brunt of the inevitable cost cutting to come. According to The Associated Press, programs like welfare-to-work and health care for low-income families have been targeted by Schwarzenegger. Unfortunately for California, there's no end in sight to its fiscal woes, as a $19 billion deficit faces the state for the next fiscal year, when Gov.-elect Jerry Brown will take Schwarzenegger's place.

Washington
Compared with California, Washington state's problems might not seem all that bad. On the other hand, given the much smaller population, and much less dynamic economy, they require no less serious action on the part of the duly elected officials there. To whit, Gov. Chris Gregoire today called for Washington to hold its own emergency legislative session and said the state faces a budget shortfall of $1.1 billion, the Seattle Times reported. Like in California, the long-term picture is equally troubling, with a projected $6 billion deficit projected over the next three years. Washington's answer? It may involve cutting health care benefits, raising taxes and closing tax loopholes, the Northwest News Network reported.

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