In Budget Deal, California Shuts $41 Billion Gap

Publication: The New York Times

Author: Jennifer Steinhauer

02/20/2009 - Take-home pay for Californians is about to shrink. Jeans, hammers, burgers and fries will cost more. Public school children will make do with old textbooks and find more classmates sitting next to them. Parents will receive fewer tax benefits, and state university students will pay 9 percent more in tuition.

As the sun rose in Sacramento on Thursday, state lawmakers ended months of political gridlock and agreed on a series of budget measures that included something for most everyone in California to despise. The $143 billion budget closes a $41 billion deficit through 2010 with tax increases, deep cuts in services and extensive borrowing.

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“California is an example of what you will see” across the country, said Susan Urahn, the managing director of the Pew Center on the States and a budget expert. The size of budget deficits in other states will lead to similarly hard-fought debates on how to close the gaps, Ms. Urahn said.

What is more, California might have set the template as other states ponder how to apply the more fungible outlays of the federal stimulus money. “My guess is states will use what they can to reduce cuts to the bone in education and health care,” Ms. Urahn said.

Read the full article In Budget Deal, California Shuts $41 Billion Gap on the New York Times' Web site.

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