California declares 'state of fiscal emergency'

The governor of California, Arnold Schwarzenegger, has declared a fiscal state of emergency as lawmakers stall on delivery of a state budget, now more than a month overdue.

Schwarzenegger said without a budget in place, the world's eighth largest economy will run out of cash by October. In an attempt to shore up the looming budget deficit of $19bn (£12bn) most state employees have been ordered to take three unpaid Fridays work leave per month. Only employees in agencies involving public safety are exempt from "furlough Friday" which is due to start in August and will continue until a new budget is enacted. Earlier this month, the governor ordered 200,000 state workers to be paid the minimum wage, again because no budget had been passed. In July 200...