Soon California can stop being the butt of jokes — although seriously, Alabama, let’s not point fingers. Party elders in Sacramento have reached an agreement that should balance the budget with $15.5 billion in cuts that will hurt students, the poor, children and the elderly. Republicans, who make up only about a third of the state Legislature, managed to thwart any new taxes.

The state will also borrow a few billion from local governments, which themselves are struggling to cope with the economic crisis.

San Jose Mercury News:

Schools will take a $6 billion cut, but won a commitment to be paid back $9.3 billion in cuts from previous years. The agreement also cuts $2.8 billion from the University of California and California State University systems, $1.2 billion from the corrections department, and $1.3 billion from MediCal funding.

Schwarzenegger and Republican lawmakers were able to uphold their vow of no new taxes with a series of accounting shifts, borrowing and fund shifts. The state will extract $4.4 billion from local governments’ revenues — about $2.1 billion in borrowing by suspending Proposition 1A, $1.3 billion in redevelopment dollars, and $1 billion in transfers from local gas taxes.

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