Budget talks at standstill, offices close

SACRAMENTO, Calif. In his continuing efforts to pare down state government during one of California's worst budget crisis, Governor Schwarzenegger ordered all state agencies to reduce their vehicle fleet by 15 percent and to sell the surplus cars at the government garage sale next month.

It's the Governor's latest move in dealing with declining revenues that has already forced him to close most state offices for three Fridays a month, make state workers stay home unpaid and pay bills with IOUs.

Budget talks were finally set to continue late Friday, after breaking down Wednesday night.

Meanwhile, a stalled budget fix is making Pa Lor anxious. The young mother just signed up for state-funded health care for her kids, but Healthy Families stopped taking new enrollees Friday because of the budget crisis.

"What do we do if my kids get sick? How am I going to take them to the doctor? I don't have enough money to cover their healthcare," said Lor.

For the first time since its inception, Healthy Families has to turn away kids. It's estimated nearly a thousand uninsured kids a day will lose access to healthcare.

There's anxiety, too, here at this gathering of city and county leaders.

They are furious at word Sacramento is going to take or borrow as much as $5 billion, not $2 billion in property tax money, redevelopment funds and gas-tax money money local governments were desperately counting on.

"That means we're going to have to contend with that big hole in the budget, and try to figure out how we're going to keep our libraries open, keep our parks open for our kids all summer and also keep firefighters and police officers on the streets," said L.A. City Councilman Tony Cardenas.

Lawmakers were suppose to begin their month long summer recess on Friday, that has now been postponed.

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