California has a deficit estimated at $15 billion. The state is legally bound to balance its budget, but it never does so by resorting to various gimmicks.
California requires a supermajority to approve any budget. Republicans have said they will not accept any budget that involves tax increases and they have enough votes to block any budget. Arnold has suggested raising money by selling the rights to future lottery money, but that is far from sufficient.
His latest ploy is to demand that the state pay workers the minimum wage so long until a budget is passed. As a student of supply-side economics, I know that the best way to get out of a recession is to ruthlessly cut government spending. Business will be so impressed that it will invest even though he cannot afford to buy anything.
If that does not work, Arnold probably have some friends in special effects who could do the trick.