SACRAMENTO – Gov. Arnold Schwarzenegger on Friday said the budget proposal he will release next month will come wrapped in a fiscal emergency declaration, a move that will force lawmakers to tackle California’s darkening budget picture months earlier than they otherwise might. The emergency means lawmakers will have to reopen the budget the governor signed in August and consider almost immediate cuts to schools, prisons and aid programs to the poor. Since those cuts will have to come when agencies already have spent more than half their promised funding for the year, the options available to save money may be drastic. For example, the Schwarzenegger administration this week floated the possibility of granting early release to more than 20,000 low-risk prison inmates. Such a move could save the state nearly $800 million through 2010. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWhicker: Clemson demonstrates that it’s tough to knock out the champSchwarzenegger’s promise to issue an emergency declaration comes as shrinking revenue from the collapsed housing market and slowing taxable sales is threatening to leave the state with a budget shortfall of $10 billion to $14 billion over the next year-and-a-half. It will be the first time Schwarzenegger will have invoked the fiscal emergency provision that was included in Proposition 58, the balanced-budget measure voters approved in 2004. Technically the declaration to come on Jan. 10 will require the governor to propose a plan to rebalance the current budget and force the Legislature to cut costs or increase taxes within 45 days. The special legislative session will focus only on the $2 billion that will need to be slashed during the current fiscal year. Lawmakers will deal with the greater deficit projected for the 2008-09 budget year when they negotiate that spending plan next summer. In a statement issued Friday, Schwarzenegger said he wants to control the growing deficit with spending cuts. He promised to “move quickly in the special session to bring this year’s budget back into balance.” “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,” he said. Assemblyman John Laird, chairman of the Assembly Budget Committee, said he agreed with the governor’s decision to pair the emergency declaration with the release of his spending proposal for the coming fiscal year. In that way, lawmakers can begin considering long-term fixes. But he also said it appeared telling that Schwarzenegger was planning to wait nearly three weeks to issue the emergency declaration. “I think he’s waiting until January because his proposals aren’t ready yet,” Laird said. “He doesn’t know what to cut.” Schwarzenegger’s announcement came amid the latest round of downbeat economic news. The state Employment Development Department said Friday that California added just 900 payroll jobs in November, following a loss of 13,500 jobs in October. “Recent data about the economy will increase the pressure on state and local budgets this year and next,” said Stephen Levy, senior economist at the Center for Continuing Study of the California Economy. Any state budget cuts to education or social programs – which account for more than three-fourths of the state’s budget – are likely to draw criticism from Democrats, who control both houses of the Legislature. They can make the final decision about spending cuts without support from minority Republicans because they require only a simple majority to enact. A tax increase would need a two-thirds majority and require support from Republicans, who say they will oppose any such attempt. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!