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Schwarzenegger: State Facing Fiscal Crisis

Saying he has no choice but to invoke emergency powers, Governor Schwarzenegger has declared that California is facing a fiscal crisis and has ordered payments to cities and counties without Legislative approval.

The move comes as local governments up and down the state edged closer to fiscal meltdown over the loss of millions of dollars a day in revenue resulting in the cut of the car tax last month by Schwarzenegger.

In addition to ordering the payments, Schwarzenegger also imposed $150 million in spending cuts — without legislative approval — to provide the funds to local government.

Meanwhile, Democrats are meeting behind closed doors to consider what options they have to respond to the governor´s move. Assemblyman Joe Nation of San Rafael says he was surprised by the governor´s actions. He says he´s worried about where the money for local governments will come from.

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