Gov. Schwarzenegger Announces Special Session to Address Fiscal Emergency

Governor Says Reducing Spending is Way to Solve the Problem

Citing a projected current-year budget shortfall of $3.3 billion, Governor Arnold Schwarzenegger announced today that he will issue proclamations declaring a fiscal emergency and calling a special session of the Legislature to address it on Thursday, January 10, 2008.

The proclamations will be issued concurrently with the release of the Governor's proposed 2008-09 state budget. Emergency legislation is also being drafted over the holidays to address the current year shortfall and will be introduced immediately upon opening of the special session.

"While California's economy remains fundamentally sound and continues to grow, a combination of factors has dramatically changed our budget outlook this fall," Governor Schwarzenegger said. "I have briefed each of the legislative leaders on our projected budget shortfall and I believe that when the Legislature reconvenes in January immediate action is necessary. I will continue my discussions with the leaders in the coming weeks, so that we can narrow as many differences as possible and move quickly in the special session to bring this year's budget back into balance. In addition, I have also met with dozens of officials in the last three weeks including law enforcement and education leaders, as well as advocates for patients and persons with disabilities, to talk about our budget situation."

Since taking office, Governor Schwarzenegger has actively pursued policies to achieve greater fiscal stability for the state without stealing from local governments and infrastructure funding. He successfully negotiated and campaigned for passage of Propositions 57, 58 and 1A, protecting local funding and transportation dollars for local projects in 2004 and he campaigned unsuccessfully for a spending cap in 2005.

"I firmly believe that the way to solve our chronic budget problem is with fiscal restraint. We will figure out how to get spending in line with revenue," said Governor Schwarzenegger. "We must take action as soon as the Legislature returns to close the current-year shortfall and balance the budget for the coming fiscal year. But it is also essential for us to make long-term fundamental budget reform an absolute priority. Our current situation makes it clear the state's budget system is flawed. However our fiscal adversity actually creates an opportunity - if we rise to the challenge - to implement lasting reform. I believe that we must and I am ready to work with the Legislature to achieve it. In the meantime, Californians should enjoy the holiday season with the confidence that our economy is fundamentally strong."

Among the factors contributing to the current-year shortfall:

• A revised - and lower - current-year revenue forecast, driven in part by the continuing slump in the housing sector and the ongoing effects of the subprime mortgage collapse.
• Increased firefighting costs related to this fall's wildfires in Southern California.
• Legal challenges that have delayed implementation of Indian gaming compacts.
• Lower estimated local property tax revenues, which affect the state's share of K-14 school funding.
• An appellate court decision in a lawsuit over teachers' retirement funding.

Under the provisions of Proposition 58, approved by Californians in March 2004, the Governor has the authority to declare a fiscal emergency if he determines that the state faces substantial revenue shortfalls or expenditure increases. The Governor is then required to call a special session of the Legislature and to propose legislation to address the fiscal emergency. If the Legislature fails to approve and send legislation to the Governor to address the fiscal emergency within 45 days, it would be prohibited from acting on any other bills or adjourning in joint recess until such legislation is passed.

Nearly Two Million Travelers Expected to Pass Through LAX, 225,000 Through ONT During Year-End Holiday Season

LOS ANGELES, CA--(Marketwire - December 20, 2007) - Nearly 2 million travelers are expected to pass through Los Angeles International Airport (LAX) during the annual year-end holiday season that begins Friday, Dec. 21, and continues through Wednesday, Jan. 2, 2008. This year's holiday period total of air travelers is forecast to exceed last year's comparable period by 3 percent.

At LA/Ontario International Airport (ONT), more than 225,000 passengers are expected this holiday season, an increase of 5 percent over last year.

LA/Palmdale Regional Airport, which opened on June 7, offers Antelope Valley travelers two daily roundtrip jet flights to San Francisco International Airport (SFO) on United Express. At SFO, passengers can make easy connections to scores of international and domestic destinations.

The busiest travel days during this holiday period are expected to be the three days before Christmas and Jan. 2, when airlines forecast flights to be nearly or 100 percent booked.

LAX passengers will experience improved conveniences, such as the expansion of non-stop FlyAway bus service from Westwood, in addition to established service from Van Nuys and Union Station. The cost is $4 one way for adults. Travelers from the Westwood and Van Nuys FlyAway locations also can obtain airline boarding passes and check baggage for a separate $5 fee -- allowing them to go straight to passenger security screening when they arrive at their terminal.

Passengers can enjoy a meal at the re-opened Encounter Restaurant in the heart of LAX. It is open for lunch daily from 11 a.m. to 4 p.m., and dinner on Friday and Saturday from 4 p.m. to 9:30 p.m.

Other new amenities at each terminal include wireless Internet service (Wi-Fi) and electric charging stations for portable electronics.

International passengers processing through customs and immigration at the Tom Bradley International Terminal will experience a brighter, spacious and more modern facility with the opening last week of the first of a three-phase renovation to the customs arrivals hall. Upgrades include brighter and more energy-efficient lighting, new temperature controls, larger and more efficient baggage-claim carousels, new work spaces and computers for customs and immigration agents to process inbound passengers, new luggage inspection stations, new digital communications wiring, new utilities and plumbing, and new restrooms. The second phase of renovations in the customs arrivals hall will begin soon to be completed Fall 2008.

Airport officials recommend passengers departing LAX arrive at their airline ticketing lobby two hours before domestic flights and three hours before international flights, especially during daily peak travel periods from 6 a.m. to 9 a.m., 11 a.m. to 2 p.m., and from 7 p.m. to 9 p.m. With winter weather conditions across the U.S. , passengers also should check with their airlines before coming to the airport to ensure their flights are on time.

Travelers at LA/Ontario International Airport are urged to arrive at the airport 1-1/2 hours before domestic flights and two hours before international flights serving Mexico.

Fed offers modest rate cut

WASHINGTON (Reuters) - The Federal Reserve cut U.S. interest rates by a modest quarter-percentage point on Tuesday, disappointing Wall Street hopes for bolder action but offering some help to an economy facing credit strains and a deep housing slump.

The central bank's decision takes the bellwether federal funds rate, which governs overnight lending between banks, down to 4.25 percent. While the action was widely expected, some economists had thought the Fed might offer a bolder half-point reduction.

In a related move, the Fed trimmed the discount rate it charges for direct loans to banks by a matching quarter point. Here too, some market participants were dissatisfied. Many had thought the Fed would lower the discount rate by more than the federal funds rate to loosen tight credit markets.

The blue chip Dow Jones industrial average .DJI closed down 294 points, or 2.1 percent, while prices for U.S. government bonds surged as investors sought safer assets.

"This was not what the market was looking for and did not move to clarify Fed intentions or assuage concerns of market participants of another leg down in the economy and resurgence of financial turmoil," said Joseph Brusuelas, chief U.S. economist of IDEAglobal in New York.

A Fed source, who asked not to be named, said the central bank was aware credit market strains had grown worse and said it was actively considering ways to ease the pressure.