California's Governor Arnold Schwarzenegger has ordered 22,000 state workers to be laid off and 200, 000 to have their wages slashed as the state faces a budget deficit of more than $15 billion. From Los Angeles, Rajesh Mirchandani reports:

Listen to the story

Arnold Schwarzenegger:
"Our state faces a looming cash crisis. This situation leaves me with no easy choices, choices, only choices with consequences, consequences that will have a direct impact on California families. And so I have a responsibility to make sure that our state has enough money to pay its bills."

The main problem is that some six weeks after California's new fiscal year began, state legislators have failed to agree a budget, which means California, with one of the largest economies in the world, has no way to pay for contractors, for many of the services it provides and, crucially, no plans for how to make up that huge budget shortfall. The Governor's move is designed to put pressure on politicians to resolve the crisis.

In fact some 30 American states face budget deficits, caused by rising costs and falling revenues in a slumping economy. But California's is by far the largest.

Rajesh Mirchandani, BBC

Listen to the words

faces a budget deficit
has to deal with not having enough money to pay for wages and services that it had planned to

faces a looming cash crisis
has to deal with the worrying problem of not having enough money

fiscal year
year (which in California starts in July) which is concerned with public money and how it is spent

crucially
importantly, significantly

make up that huge budget shortfall
reduce or replace the amount of money that has been lost or overspent

move
action to achieve something

put pressure on
ask someone very strongly to do something even if they don't want to do it

to resolve the crisis
to find a solution to the very serious problem

rising costs and falling revenues
things cost more to buy and less money is coming in

a slumping economy
when the country's trade and industry is doing badly

Read more about this story

To take away:
Download or print (22 K)