Calif governor sees $15.4 billion budget gap, wants big cuts

SACRAMENTO, California (Reuters) - California Gov. Arnold Schwarzenegger on Thursday proposed harsh measures to tackle a budget shortfall of $15.4 billion, including deep spending cuts for schools and health programs and eliminating 5,000 state jobs.

Schwarzenegger warned the state's budget gap could grow to $21.3 billion if voters reject budget-related ballot measures in a special election next week. And he said California also will need to sell a $6 billion revenue anticipation warrant to help balance its books.

Schwarzenegger said education spending needs to be cut by $3 billion, which may require shortening the state's school year by five days, and he will seek spending cuts across social and health-care services funded by the state.

If the ballot measures fail and California's deficit swells to $21.3 billion, Schwarzenegger said education could suffer an additional $2.3 billion in spending cuts and social and health programs would see their budget cuts even more.

Tax increases are not part of Schwarzenegger's budget plan, a revised version of his earlier plan, and he said during a press conference in the state capital of Sacramento that he would not sign a budget that includes higher taxes.

Schwarzenegger, however, said he hopes to raise revenue by selling seven state properties, including San Quentin State Prison and the Los Angeles Coliseum, two aging state facilities.