With every passing year, California experiences added misery to its budget mess. This year, it would seem that the state lawmakers and outgoing Governor Arnold Schwarzenegger have really outdone themselves. California is likely to face a deficit of $25 billion next year, all due to a ‘well-poised’ budget that was passed last month.  What is the exact breakdown as one might ask. Highlights of the budget include budget cuts, which are:

$1.4 billion: Reduction in pay for state workers by 5%.

$2.4 billion: Cut funding for schools and community colleges.

$868 million +$950 million: Budget cuts in the Health care field.

On the other hand, $6.9 billion will be sought from the federal government by asking it to cover more state expenses but only $1.3 billion has been promised. In short, the governor seeks an undercover bailout scheme which at the moment seems unlikely.

Budget cuts and such strategies aren’t much of a help in the long run. It is quite similar to putting off today’s problems until tomorrow, similarly threatening the federal government isn’t going to help as well; what they require is a thoughtful, planned, log-term solution . In a scenario where the whole country is recovering from recession, such short-comings of a state can easily hamper the slow healing process of a sluggish economy.