State faces another $8 billion hit

The recession will take an $8 billion bite out of California's finances next year unless Gov. Arnold Schwarzenegger and lawmakers make more spending cuts or close some tax loopholes, the state's leading budget analyst said in a new report Friday.AP in the Daily News.

Despite a budget deal last month that was meant to close a $42 billion deficit through June 2010, the report from the Legislative Analyst's Office said state finances already have fallen short as revenues come in lower than expected.

The grim news suggested another round of budget fighting in the Capitol, just weeks after Schwarzenegger and legislative leaders hammered out a hard-won compromise that closed the gap by cutting $15.8 billion from state programs, raising $12.8 billion through tax increases and borrowing billions more.