Huge Deficit Stuns Cincinnati; California Faces Cash Crisis

A struggling economy and a forecast of income tax revenues that was far off the mark has Cincinnati City Council staring at a $40 million budget deficit through 2010 - sparking talk of layoffs and cuts in service in the year to come.

...

Voters yesterday added $6 billion to a budget deficit when they defeated five measures backed by Governor Arnold Schwarzenegger, a Republican, and the Democrat-led Legislature. The governor said lawmakers will be forced to cut deeper into spending on everything from schools to jails as the state prepares to borrow record sums from investors.