California Governor Arnold Schwarzenegger will seek “terrible cuts” to eliminate an $18.6 billion budget deficit facing the most-populous U.S. state through June 2011, his spokesman said, according to Bloomberg.
“We can’t get through this deficit without very terrible cuts,” Schwarzenegger spokesman Aaron McLear told reporters in Sacramento. “We don’t believe that raising taxes right now is the right thing to do.”
In January, the governor said California may have to eliminate entire welfare programs, including the main one that provides cash and job assistance to families below the poverty line, without an influx of cash from the federal government.
California has the lowest credit rating among U.S. states. A taxable California bond maturing in 2039 traded for a yield of 7.08 percent today, up from an average of 6.87 percent on May 6, according to Municipal Security Rulemaking Board data.
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