California mulls sale of prison amid widening budget deficit(2)

The San Quentin State Prison is among seven state-owned properties that Governor Arnold Schwarzenegger is considering selling as the state ponders ways to plug a ‘certain’ $15.4bn budget shortfall. In February, lawmakers made painful concessions to close what was then a $42bn budget deficit.

California may sell the San Quentin State Prison and seek a private sector partner to take over the California Science Center, amid other measures being considered by Governor Arnold Schwarzenegger to plug a growing budget deficit.

“With the continued global recession, we face a certain $15.4 billion shortfall and, if $6 billion in February's budget resolutions are rejected on May 19, that number will increase to $21.3 billion,” Schwarzenegger said in a press release.

With the continued global recession, we face a certain $15.4 billion shortfall

Arnold Schwarzenegger

The move comes just three months after the state’s lawmakers pulled several all-nighters to agree on a budget to solve a $42 billion deficit using a combination of spending cuts, tax increases and borrowing.

To plug the new budget shortfall, Governor Schwarzenegger proposed selling seven state-owned properties. These include the San Quentin State Prison as well as the Los Angeles Coliseum, a concert hall in Daly City and fairgrounds in Sacramento and San Diego.

No information was provided as to how much money the governor could expect to raise through the sales.

In December, speaking at the California Infrastructure Summit, Will Kempton, director of the California Department of Transportation, said the state was considering privatising its highway rest stops. The rest stops, however, were not included in the Governor’s list of assets that could potentially be sold.

Other budget stopgap measures included cuts to education and health and human services budgets as well as $6 billion in additional borrowing.