Governor betting on lottery

SACRAMENTO -- Gov. Arnold Schwarzenegger on Wednesday released a $144.3 billion state budget that eliminates a massive deficit by selling lottery bonds and cutting billions in state programs. AP in the Daily News.

The spending plan for the fiscal year that begins in July is austere, a byproduct of a slowing state economy.

Tax revenue has been falling far short of what California needs to keep pace with spending obligations, leading to a $15.2 billion shortfall.

"As everyone knows, we are facing an extremely tough budget year," Schwarzenegger said during a news conference at the Capitol. "Our crisis is real, and it is very serious."