Governator: Budget Shortfall to Reach $42 Billion by 2010

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    NEWSLETTERS

    AP
    The Republican governor said Wednesday that Washington needs to "put money into the housing market." California has been devastated by the mortgage crisis, with thousands of foreclosures and median home prices falling sharply.

    A spokesman for Gov. Arnold Schwarzenegger says California's budget deficit will hit $41.8 billion through the next fiscal year.'

    Spokesman Matt David says plummeting revenues have made the shortfall worse than previous projections. He says it's now forecast to hit $41.8 billion through fiscal 2009-10, which ends in June 2010.

    Schwarzenegger said Wednesday that the shortfall for the current fiscal year has grown to nearly $15 billion.

    The governor was meeting with legislative leaders Thursday.

    He's trying to persuade them to agree to a combination of cuts and revenues to address the dramatic shortfall.

    He has declared a fiscal emergency for the state but lawmakers have so far failed to take action.