California plans new borrowing, less spending

As a response to the deficit hurting the most populous state in the US and one of the biggest economies in the world, Governor Arnold Schwarzenegger announced Monday night plans to cut spending and borrow more in order to close the budget deficit, both of which could amount to as much as $15bn extra funds for the government.

Cuts will be coming from spending for schools and community colleges, from Medi-Cal, the health programme for low earners and the poor, from CalWorks, the state’s welfare-to-work programme, and from the state’s in-home support services programme for the frail and disabled.

Read up on this via the FT HERE.

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