Gov. Gray Davis on Thursday ordered state agencies to submit 15% budget cut proposals to his office by Oct. 22. He will convene a special meeting of his Cabinet the following day to discuss the proposals. Only public safety and firefighting departments are to be spared cuts. Davis will release his budget plan in January. The state's fiscal year begins July 1.
The state's budget contains a $2.6-billion reserve, the largest in two decades, but the sagging economy is projected to cut revenues by far more. They were down by more than $1.1 billion in the first quarter of the fiscal year. In addition, Davis is struggling to find a way to repay the more than $6 billion that California spent this year to buy electricity on behalf of three cash-strapped utilities.
"We're under no illusions; it's going to be very painful and there are going to be some very difficult choices."--Sandy Harrison, a spokesman for Davis' Department of Finance.