Arnie declares fiscal emergency in California

New California Governor Arnold Schwarzenegger on Wednesday declared financial emergency in the state and invoked emergency powers to impose US $150 million in spending cuts without legislature's approval.

"I had to do this," Schwarzenegger said at a news conference.

The move comes as local governments in the state edged closer to financial meltdown following the loss of millions of dollars a day in revenue resulting from Schwarzenegger's decision to cut the car tax.

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"My reaction, like a lot of my colleagues, was one of surprise," said Democratic Assemblyman Joe Nation. "I think a lot of us are worried about where he's going to get the money from. I've said it before, I don't think you get yourself out of a hole by digging deeper -- his actions just means that there will be more devastating cuts down the road."

Since Schwarzenegger cut the car tax, cities and counties have lost more than $300 million collectively. The money pays for a variety of services, especially for police and fire services.

Agencies