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California voters have rejected five budget measures in a special election, forcing Gov. Arnold Schwarzenegger to face a $21 billion deficit, Jerome Corsi’s Red Alert reports.

Just to drive the point home, the day after state voters rejected Schwarzenegger’s spending ballot measures, the California Citizens Compensation Commission voted to slash pay for the governor, legislators and statewide officeholders by 18 percent.

The California taxpayer revolt evidenced in the rejection of the five budget resolutions by margins approaching two-thirds of the voters was consistent with the spirit of the April 15 tea parties held around the nation, in which average Americans protested the Obama administration’s trillion dollar deficit spending and the move to increase federal and state taxes to finance the deficits.

WND reported that an estimated 1 million Americans participated in some 1,000 tea party protests held in all 50 states.

The shortfall follows a February fix in which California legislatures closed a $42 billion California budget deficit by a series of step cuts and new taxes.

This time, Schwarzenegger may be forced to fire 5,000 of the state’s 235,000 workers and engage in a series of additional cuts that involve slashing education by $5 billion, selling key state properties such as the Los Angeles Coliseum and borrowing $2 billion from local governments, according to the Los Angeles Times.

The newspaper also reported that a worst-case scenario could call for the release from state prisons of up to 19,000 illegals who would face deportation, plus the transfer of up to 23,000 state prisoners to county jails.

“The problem faced by states such as California is that the economic recession has lowered anticipated tax revenues at a time when a strategy of raising state taxes to increase state revenue is almost certain to be self-defeating, further depress economic growth rather than simply increasing state revenue,” Corsi wrote.

Anticipating the bad news, Schwarzenegger traveled to Washington where he requested an Obama administration bailout in the form of a government guarantee on $6 billion in proposed California loans.

WND reported Rush Limbaugh’s prediction that Schwarzenegger would argue to the White House that like the U.S. auto industry, California is “too big to fail.”

“If the Obama administration concedes to blue state political pressure to bail out California, the request is certain to be followed by virtually every other state,” Corsi noted. “Meanwhile, all signs point to the recession deepening in California.”

In April 2008, foreclosed homes made up 38 percent of all homes sold in California; in April 2009, one year later, that figure increased to 54 percent, according to the Los Angeles Times.

April 2009 was the seventh consecutive month in which most homes sold in Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura counties had been foreclosures.

Red Alert’s author, whose books “The Obama Nation” and “Unfit for Command” have topped the New York Times best-sellers list, also noted that the Bureau of Labor Statistics revealed that unemployment in California had reached 11 percent in March.

Corsi received his Ph.D. from Harvard University in political science in 1972. For nearly 25 years, beginning in 1981, he worked with banks throughout the U.S. and around the world to develop financial services marketing companies to assist banks in establishing broker/dealers and insurance subsidiaries to provide financial planning products and services to their retail customers. In this career, Corsi developed three different third-party financial services marketing firms that reached gross sales levels of $1 billion in annuities and equal volume in mutual funds. In 1999, he began developing Internet-based financial marketing firms, also adapted to work in conjunction with banks.

In his 25-year financial services career, Corsi has been a noted financial services speaker and writer, publishing three books and numerous articles in professional financial services journals and magazines.

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