California in 'fiscal emergency'

The governor of California has declared a fiscal emergency in the US state to address a budget deficit of some $24.3bn. Governor Arnold Schwarzenegger also ordered many state offices to close for three days each month until June 2010, with staff unpaid for those days.

California has been one of the US states hardest hit by the recession.

The moves comes after state legislators missed a 1 July deadline to approve a budget for the coming financial year.

State Controller John Chiang has said the failure to meet the deadline means the state deficit will increase by up to $6.5bn by September. 

But Mr Schwarzenegger said that despite the crisis, he was proud of California, saying 30 more states were also yet to agree a budget.

For many states, 30 June heralded the end of the fiscal year, but several were facing crucial decisions to balance the books as the deadline neared.

Many of the states are legally required to have a balanced budget, which can mean cutting services and firing workers. 
 

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