California's Budget Woes Could Hit $14 Bil

LOS ANGELES-California’s budget deficit could reach a staggering $14 billion in the coming year, Gov. Gray Davis says, a shortfall that analysts say could lead to the widespread cancellation of everything from major public-works projects to the hiring of new police officers.

At best, Davis says, current projections indicate that the deficit will total only $8 billion. But the $14-billion deficit level could be reached if the state’s economy doesn’t turn around soon, he warns.

Davis’ announcement marks the first time the Democratic governor has put a dollar figure on the state’s worsening financial picture. Republican lawmakers have been talking about it for weeks, hoping to force Davis into trimming the state bureaucracy–which grew steadily since the end of the early ‘90s recession–and making other cutbacks.

Earlier this week, Davis agreed to a state hiring freeze but stopped short of ordering layoffs. The governor is said to be considering imposing new taxes and suspending previously approved tax breaks in order to help fill the budget gap. Senate Republican Leader Jim Brulte of Rancho Cucamonga calls any tax hikes “unacceptable” and says the state government should not renege on the tax breaks that it already promised consumers and businesses.