In the wake of the Richmond refinery fire and the power failure of another refinery in Torrence, Californians saw a major spike in gas prices. Read the full story

By Stephen Davies

Staff Writer

Outgoing California Governor Arnold Schwarzenegger is proposing a series of cuts to social services and prison facilities in a last-minute effort to close California’s budget gap.

Schwarzenegger called the California Legislature into session on Monday after declaring a fiscal emergency over the $6.4 billion deficit in the budget for this fiscal year, just one month after signing the budget into law following a record-setting legislative delay.

Schwarzenegger’s spokesman Aaron McLear warned that “ugly cuts” would have to be made, as California’s budget deficit could balloon to $25.4 billion by June 2012 if the Legislature fails to curb spending or raise revenues.

The backbone of the proposal comes from the elimination of CalWORKS, a temporary financial assistance program for struggling families that was consistently rejected by lawmakers this year. This would eliminate all state funding for childcare and move some non-violent felons out of state prisons and into county custody.

The Senate and Assembly Budget Committees both had meetings Tuesday afternoon and are beginning to work on the deficit. However no votes are expected to be taken until after Governor-elect Jerry Brown, who hosted his own budget summit in Sacramento on Wednesday, takes office on Jan. 3.

It is believed that Schwarzenegger will keep his promise to not cut community college funding below the levels established in the January 2010 budget proposal, but the continued dire fiscal situation could change that policy at any time.

Democrats, who currently control both houses of the California Legislature, called Schwarzenegger’s proposals “a rehash of proposals we have already considered and rejected,” according to Assembly Speaker John Perez (D-Los Angeles).

They are expected to counter with their own proposals, including the expected turnover of a veto issued by Schwarzenegger of childcare services during the fight over the budget crisis. They’ve also made no secret of the fact that they would prefer to solve the problem once Governor-elect Brown takes over the reins.

Schwarzenegger remains undeterred, saying that he wants the budget problem to be “a little bit easier” for Brown.

Democrats are expected to embrace one of the current governor’s proposals – a tax swap written into the current budget that will save an estimated $850 million from voter imposed rules that banned diversion of funds from local and transportation funding.