Governor Schwarzenegger is about to declare a state of economic emergency, which will give him broad powers to cut spending in the state.
The law that lets him do this has never been used before; it’s 2004’s Proposition 58, and you can read a pretty good analysis of it here. The basic language says that the governor can call the Legislature back into session and propose measures to address the fiscal crisis. The Legislature has 45 days to act on those proposals and can’t adjourn or move on to any other business until it does.
The problem here is that the state Constitution requires any budget bills to pass the Legislature with a two-thirds vote. So in effect, the guv can send over a list of nasty cuts, and a handful of Republicans can block the Democrats in the Legislature from enacting any tax hikes (or, for example, restoring the motor vehicle license fee, which would bring in about $6 billlion alone).
So Schwarzenegger can come pretty close to demanding deep cuts in social programs and in aid to cities and the Legislature will have a hard time doing anything but enacting them.
That will suck for San Francisco, which, like all cities, will get slammed as state money vanishes.