The beginning of more bankrupt U.S. States to come

California, the eighth largest economy in the world, is broke.

Since state legislators failed to meet an end of January deadline on an agreement to make up for California's $40 billion budget gap, residents won't be getting their state tax rebates, scholarships to Cal Grant college will go unpaid, vendors invoices will remain uncollected and county social services will cease.

At least, temporarily. Services and payments will resume once state legislators come to an agreement on the budget.

Governor Schwarzenegger has ordered state employees to take two days off a month without pay through June 2010 to save about $1.4 billion. Since there was no deal by Friday, February 6th, state government workers began taking take their first furlough days.

"Some 46 states face budget shortfalls, forcing them to slash funding for many services," reported CNN. "But California, the largest state in the union by population, faces a deficit that totals more than 35% of its general fund."

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