California's Red Ink Put at $21 Billion

The state Legislature's nonpartisan budget analyst said the budget pushed through earlier this year by Gov. Arnold Schwarzenegger and lawmakers didn't patch the deficit and instead created a $6.3 billion gap for the current fiscal year ending June 30.

Legislative Analyst Mac Taylor said the shortfall will be $14.4 billion for 2010-11, the Associated Press reported.

The report does suggest California's economy is rebounding, but a full recovery isn't likely for another year or two, according to analysts.

Taylor said Schwarzenegger and lawmakers will have to make more tough decisions about spending cuts, higher taxes and borrowing. Unless the governor and lawmakers reconsider spending decisions and add revenue, the state will face $20 billion deficits each year through 2015, Taylor warned.

Since February, California has made nearly $60 billion in adjustments over two fiscal years, according to the AP. Those have taken the form of cuts to education and social services, temporary tax hikes, and adding money from the federal stimulus package.