California Governor Says State Deficit Could Reach $14 Billion

One day after imposing a statewide hiring freeze and ordering cuts of $150 million for the current fiscal year, California Gov. Gray Davis (D) said on Oct. 24 that the state will likely face a budget shortfall of $8 million to $14 million, the Los Angeles Times reports. Briefing state legislative leaders, Davis said that the estimate does not include the "roughly $6 billion borrowed from the [state's] general fund to pay for energy purchases" (Tamaki, Los Angeles Times, 10/25). Exempt from the hiring freeze are about one-quarter of the state's positions, including public health positions in the Department of Health Services. In addition, the freeze does not apply to workers at hospitals and health care facilities (Hill, Sacramento Bee, 10/24). The $150 million budget cuts are in addition to the 15% across-the-board cut for FY 2002-2003 Davis announced earlier this month. Government revenues are running $1 billion below projections since May. Davis officials did not specify how much the new cost-cutting measures will save the state (Tamaki, Los Angeles Times, 10/24). Davis on Oct. 24 also said that he believes that the economic stimulus package under consideration in Congress should "reimburse states for increased security and public health costs incurred" since the Sept. 11 attacks on the World Trade Center and the Pentagon. He estimated that the state is spending $300,000 to $1 million daily for such services (Los Angeles Times, 10/25). For further information on state health policy in California, visit State Health Facts Online.