State Deficit Jumps to $21 Billion



California is facing a new financial crisis, as the projected budget deficit for next year has now ballooned to $20.7 billion, according to the nonpartisan Legislative Analyst's Office. The news comes just four months after the governor and legislative leaders slashed $24 billion from this year's budget. And according to the Chron, Governor Schwarzenegger is against raising tax increases to help solve the new crisis, which is being caused primarily by declining revenues because of the recession.

In fact, the paper notes that the governor vetoed a measure by Berkeley Assemblywoman Nancy Skinner that would have forced online retail giants and to finally start collecting sales taxes. Independent retailers have long complained that the Internet behemoths enjoy an unfair advantage in California because they don't charge their customers any sales tax.