Governor Arnold Schwarzenegger called on state legislators Tuesday to enact painful budget cuts to help solve California's enormous deficit, using apocalyptic Biblical language to underscore the severity of the crisis, AFP reported.
"California's day of reckoning is here," said Schwarzenegger, addressing the legislature in the state capital Sacramento.
"As I stand here today we are in the midst of the greatest economic crisis since the Great Depression," said the former Hollywood action movie star, who runs a state that would be the world's eighth largest economy if it were a country.
"In the past 18 months one-third of the world's wealth has vanished," said Schwarzenegger, adding that revenues have dropped 27 percent from last year.
The recession has hit the state hard: California has an 11.2 percent unemployment rate, higher than the US national median of 8.5 percent.
When adjusted for inflation and population, the revenue levels in California -- also the most populous state of the union -- are comparable to those from the late 1990s, he said.
The Austrian-born former Mr. Universe, a moderate Republican who is elected California governor in 2003 on a platform of fiscal reform, has had difficulty reaching consensus with the California state legislature, dominated by Democrats.
A vocal conservative Republican minority is also large enough to hold a veto over budget issues, as a 1978 voter-approved amendment to California's constitution says tax increases can only be approved if there is a two-thirds legislative majority.
In February Schwarzenegger and the legislature agreed to measures that would help cover the state's exploding deficit.
Yet on Tuesday, "just three months after our February budget, we once again face a 24 billion dollar deficit," Schwarzenegger said.
Schwarzenegger's proposed cuts include plans to lay off around 5,000 state workers and to slash education spending by around five billion dollars.
The moves would lead to the school year being cut by seven days per year, while an estimated 38,000 non-violent inmates held in state prisons would have their sentences commuted to facilitate early release.
"It's an awful feeling. But we have no choice," said the governor. "Our wallet is empty. Our bank is closed. Our credit is dried up.
"We must make these cuts and live within our means, because what is the alternative," he said.
In a drastic attempt to circumvent the legislative deadlock, Schwarzenegger put six revenue-raising measures to a popular vote on May 19.
Proposals to increase sales taxes, income taxes, car taxes and other measures were rejected by a margin 60 to 70 percent.
The sole measure to pass, by 75 percent, was a freeze on the wages of the governor, the legislature, and other top state officials.
After the measure defeat, Schwarzenegger said the result had left California facing "fiscal disaster."
In April Schwarzenegger wrote to the state legislature stating that, for the first time since 1938, California faced a drop in its tax revenue stream, a consequence of the nationwide recession.
California has a strong industrial base, with auto assembly plants, airplane factories, and a large textile industry. Its central valley is one of the most important agro-industrial areas of the country.
A key center to the information technology and computer industry, Silicon Valley, is located in northern California, while southern California is home to Hollywood, the hear of the US entertainment industry.
California also has a vast bureaucracy, including a veritable army of police and firefighters. It spends millions each year in natural disaster rescue operations -- including fires, drought and earthquakes.