California shortfall $21.3 billion if measures fail

SACRAMENTO, California (Reuters) - California faces a state budget shortfall of $21.3 billion if voters reject budget-related ballot measures during the state's May 19 election, Gov. Arnold Schwarzenegger said on Monday.

In a letter to top lawmakers, Schwarzenegger said that even if voters approve the ballot measures, the government of the most populous U.S. state will face a budget deficit of $15.4 billion.

"Absent swift action, the state will be facing a very serious cash crisis," Schwarzenegger said in his letter, provided by email to Reuters.

"We now face the leanest of times," Schwarzenegger said. "California, for the first time since 1938, faces a decline in personal income."

Recession has hit California hard, and state leaders expected the state's budget woes would carry over into its next fiscal year, which begins in July, even though they closed a budget shortfall of more than $41.6 billion in February.

"Since that time, the severe economic downturn that California, like the rest of the nation, has been facing has worsened substantially," Schwarzenegger said. "These changes in the state's economic and revenue pictures have caused a significant new budget problem to emerge."

A Schwarzenegger aide said the governor will release two budgets plan on May 14, one for balancing the state's books should voters approve the ballot measures and the other in case they reject the measures.

(Reporting by Jim Christie; Editing by Gary Hill)