Governor warns of possible $10 billion deficit — California could face a $10 billion budget shortfall this year, far worse than the deficit projected only three weeks ago, officials from Gov. Arnold Schwarzenegger’s office warned education leaders on Tuesday, according to several schools representatives.

Governor wants a higher sales tax — Gov. Arnold Schwarzenegger will push for a sales tax increase when he calls legislators back to Sacramento next month, California education leaders said Tuesday – and for cuts of more than $2 billion in school spending. The leaders also said after a closed-door meeting with the governor that he estimated the current size of the gap between state revenues and spending in the budget he signed only last month at between $5 billion and $8 billion, and “possibly more.”