California state legislators are considering radical revenue-raising measures including a new services levy and a temporary tax on high earners to address a budget crisis that has spiralled into a $20bn (€12.98bn, £10.1bn) deficit.

Swingeing spending cuts have been proposed, including controversial cuts to the education budget. But with Governor Arnold Schwarzenegger expected to announce next week that the deficit has grown from $7bn to $20bn, pressure is growing for new taxes.