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Governor Proposes Sales Tax Increase And Spending Cuts

Sacramento, Ca — Governor Arnold Schwarzenegger is proposing a 1.5% increase in the state´s sales tax and $4.5 billion in cuts to balance the current $11.2 billion budget deficit.

?We have a dramatic situation here and it takes dramatic solutions and immediate action,? said Schwarzenegger at a news conference. ?We must stop the bleeding.?

The largest cut that Schwarzenegger is proposing is a $2.5 billion reduction in Proposition 98 education spending. Cuts are also proposed to higher education, CAL Works, Medi-Cal, the Department of Corrections and public safety grants.

Additionally, Schwarzenegger will ask legislators to approve a one-day-a-month unpaid furlough for state workers over the next 19 months.

Lawmakers have been called to attend a special session.

Written by BJ Hansen