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Schwarzenegger Lays Out Grim Scenario for Calif. Budget

— Governor Schwarzenegger rolled out two grim scenarios for California today. He's proposing billions in cuts to schools, laying off 5,000 state workers and borrowing money from cash-strapped local governments. He also wants to cut the school year by five to seven days and sell prime state properties like San Quentin prison. The Governor says the cuts will be deeper if the propositions on next week's ballot pass - and the state has few options:

"Sacramento is not Washington. We cannot print our own money or more money," says Schwarzenegger. "We have to only spend what we have. As Governor I have the responsibility to level with the people on the tough choices that we face in the future."

Schwarzenegger rolled out two versions of his budget plan - one if the ballot measures pass, and another if they fail. If voters reject the propositions, the state's deficit is expected to be more than $21 billion. Critics call the timing of the Governor's budget announcement a political scare tactic to get voters to approve the measures. Most are trailing in the polls.

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