In an effort to ease a $15.2 billion budget shortfall in California’s general fund, Gov. Arnold Schwarzenegger has proposed borrowing from several of the state’s “special funds,” including $10 million from industry fees earmarked to inspect salons and spas. According to an article in the Sacramento Bee, Schwarzenegger is promising to repay most of the $574 million in special funds within three years, but consumer and environmental activists are wary of the promise, given the state’s spotty repayment record when similar moves were made in the past.

Both Fred Jones of the Professional Beauty Federation of California and Kristy Underwood, executive officer of the state Board of Barbering and Cosmetology commented for the article. Jones said that by taking the special funds, the administration is stripping the state government’s ability to protect consumers. The extra cash, he said, could be used to bolster the state’s inspection team. Underwood said the governor’s proposed loans would not slow the board’s inspection efforts. In fact, she said the board plans to add seven inspectors next year.

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