Last modified: Thursday, July 2, 2009 9:59 AM PDT States are without budgets as key deadline passes SACRAMENTO, Calif. (AP) — The finances of several states around the nation are sinking deeper into chaos as lawmakers struggle to work out budget differences amid a recession that has wiped out tax revenue and set the stage for dramatic cuts in service and pay for government workers. The start of the new fiscal year arrived Wednesday with states from California to Connecticut still without spending plans in place. Gov. Arnold Schwarzenegger declared a fiscal emergency and ordered state offices closed three days a month to save money as state officials plan to pay bills with IOUs starting Thursday. Deep budget cuts have already forced California school districts to cancel summer school programs, moves that have affected — among others — elementary and middle school students in Los Angeles, which has the country’s second largest district. School officials in North Carolina, Oregon, Florida and other states have also cut or limited summer classes. Cutbacks to other programs — and possibly government-wide shutdowns — loomed with cash quickly running out. But the pain extends far beyond the West Coast. The governor of Pennsylvania is proposing a 16 percent tax increase. A budget veto by the Illinois governor left the state with no spending plan at all. Indiana barely avoided a shutdown.