BusinessWeek Logo
California

Wikipedia: Public Domain

California


Budget gap (as a % of the total budget): 22%
Gap: $22.2 billion

California Governor Arnold Schwarzenegger warned this week that the state might need to borrow $7 billion from the federal government, if credit markets don't ease, to pay for salaries and other operating costs. The state, which has been battered by falling home prices and foreclosures, enacted a budget that imposed cuts to the state's health insurance program for the poor and other social service programs.