Gov. Arnold Schwarzenegger said Friday he will declare a ‘fiscal emergency’ in January to give him and the Legislature more power to deal with the state’s growing deficit. Schwarzenegger made the announcement Friday after meeting with lawmakers and interest groups this week to tell them California’s budget deficit is worse — far worse — than economists predicted just a few weeks ago. The shortfall is not $10 billion, but more than $14 billion — a 40 percent jump that would put it in orbit with some of the state’s worst fiscal crisis, those who have met with him said. A fiscal emergency would trigger a special session and force lawmakers and the governor to begin addressing the shortfall within 45 days. ‘What we have to do is fix the budget system. The system itself needs to be fixed, and I think that this is a good year, this coming year, to fix it,’ Schwarzenegger said in Long Beach, where he was promoting his plan for health care reform. California is struggling with shrinking state tax revenue from the meltdown of the subprime housing market and the credit crunch on Wall Street. State spending also […]