California fiscal officials try 'Scared Straight' approach with Legislature

Reporting from Sacramento, Jordan Rau and Patrick Mcgreevy -- In the 1970s, hardened felons tried to deter juvenile delinquents from lives of crime through "Scared Straight" presentations in which they portrayed prison life in all its brutal unpleasantness.

On Monday, California's top fiscal officers attempted to deliver a similar jolt to state legislators who have yet to address a $28-billion projected budget gap.

In a rare joint session of the Assembly and state Senate, the treasurer and controller, along with the senior fiscal advisors to the Legislature and Gov. Arnold Schwarzenegger's administration, depicted the dismal consequences of a continued budget impasse between legislative Democrats and Republicans.

The upshot:

* Before the end of the month, state road and school construction projects -- heralded as the best economic stimulus the Capitol can offer -- will go idle.

* By March, California will run out of cash, forcing thousands of vendors to take IOUs or nothing at all.

* And by June, the lawmakers will face a financial disaster that will require twice as much in painful cuts or tax increases as currently proposed.

"As unpalatable as tax increases or further program cuts may appear, neither is as toxic to the state's fiscal heath as doing nothing," said state Controller John Chiang.

Democratic leaders called the unusual session in hopes that lawmakers would take action on the fiscal emergency Schwarzenegger declared last week. Although the state's grim situation has been apparent for months, GOP lawmakers nixed a Democratic plan just before Thanksgiving to reduce the gap by tripling the state's car tax and cutting programs.

"I think some of my colleagues on both sides of the aisle are living in denial, frankly," Assembly Speaker Karen Bass (D-Los Angeles) said before the session.

Yet there was little indication that the two-hour session had shifted the political dynamic. Bass planned to spend today in Washington, D.C., pressing the federal government for financial assistance to ease the crisis, something she has emphasized repeatedly.

The Republicans, who attended reluctantly, refused to accept tax increases, instead emphasizing the importance of limiting state spending and ferreting out waste and bloat in existing programs.