Legislative budget analysts raised their estimate of Arizona's midyear budget shortfall to nearly $2 billion, up from approximately $1.5 billion. The growing shortfall, roughly a fifth of the budget, prompted calls to cut spending, increase taxes and raid voter-mandated programs.

The Joint Legislative Budget Committee staff on Thursday cited the latest drops in tax collections, increased spending for safety-net programs and newly reduced expectations from some budget-balancing maneuvers as it boosted its shortfall estimate on the current state budget.

Other elements of the shortfall already included a nearly $500 million deficit carried over from the last fiscal year and about the same amount of budget savings lost when Gov. Jan Brewer vetoed parts of the budget on Sept. 4.

The budget has roughly $10.1 billion of state spending, including $1.1 billion funded by federal stimulus dollars. Before being augmented by the federal money, borrowing and other maneuvers, regular state tax collections provide only $6.4 billion.

Arizona's economy has been hit hard by the recession, and economists said Thursday the recovery will be slow and long.

A New Jersey man faces up to 40 years in prison when he's sentenced for twice traveling to western Pennsylvania to have sex with a teenage girl he met on the Internet.

Twenty-nine-year-old Andrew Luko, of Bridgeton, N.J. pleaded guilty Wednesday to two counts each of statutory sexual assault and aggravated indecent assault.

Cambria County prosecutors say Luko came to Pennsylvania twice in 2007 to have sex with the Johnstown-area girl in motels. She was 14 when he first visited in March of that year, and she had turned 15 by the time he visited for three days that July.

Police tracked Luko using motel records and his vehicle registration.

A Malibu man has pleaded guilty to failing to report more than $1 million he transferred to a Swiss bank account.

John McCarthy formally pleaded guilty on Tuesday to one count of failing to file a Foreign Bank and Financial Accounts report. He faces up to five years in prison and fines totaling $250,000 when he is sentenced on Jan. 28.

McCarthy was the first person to be named publicly after the Swiss and U.S. governments reached a deal in August to settle American demands for the identities of suspected tax dodgers. The Internal Revenue Service is seeking more than 52,000 names from UBS AG, but both governments wouldn't say how many names will be revealed.

Prosecutors say McCarthy funneled the money to a UBS account with the help of a Swiss lawyer and bank officials.

The bankrupt Catholic Diocese of Wilmington began its court fight Wednesday with

victims claiming sexual abuse by its priests over the value of its estate and how much will be available for claims.

Attorneys for most of the 142 victims indicated they may seek to expand the bankruptcy to include parishes that operate in the Delaware-based diocese but were not part of the Chapter 11 bankruptcy filing Sunday.

The attorneys for the diocese pledged an open process that they said would be the quickest way to resolve the claims that stem from alleged abuse beginning as far back as 1954.

The diocese became the seventh in the United States to seek bankruptcy protection, and its filing put on hold the scheduled start of eight civil trials relating to a defrocked priest.

Attorney James Patton, representing the diocese, opened the hearing by acknowledging the abuse by priests.

A federal judicial panel has rejected California's plan for reducing the state's prison population because it failed to meet the terms of an earlier court order.

In August, the panel ordered California to reduce its inmate population by roughly 27 percent, or 40,000, over two years. The courts have found that prison overcrowding is the main cause of negligent medical and mental health care.

Gov. Arnold Schwarzenegger's administration subsequently submitted a plan calling for a reduction of 23,000 inmates.

On Wednesday, the judges gave the administration 21 days to submit a new plan. If it's inadequate, the court said it will develop its own.

In a statement, the administration said it objects to what it sees as an arbitrary inmate cap but will respond to the court on Nov. 12.

Law firm Carlton Fields P.A. has filed suit against Atlanta rapper Ludacris. reports the Courthouse News Service.

Luda is being sued for non-payment of legal fees for services rendered between March 2008 and April 2009.

The firm represented Ludacris and his Ludacris Foundation in a 2007 personal injuries and negligence complaint. Now, it claims that the rapper ows $61,860.20 in upaid legal fees - in addition to court costs.

Carlton Fields claims it also advanced the defendants in the previous case, Lawrence A. Hyde v. Roberta J. Shields, Christopher B. Bridges and Ludacris Foundation, out-of-pocket expenses.

Three once-powerful members of Mexico's Arellano Felix drug cartel have pleaded guilty to criminal charges in San Diego.

Jorge Aureliano Felix admitted Wednesday to working with members of the Tijuana-based cartel to smuggle hundreds of tons of cocaine into the United States and bringing hundreds of millions of dollars in proceeds back to Mexico.

The U.S. Attorney's office says Armando Martinez Duarte pleaded guilty Friday. Efrain Perez pleaded guilty Monday.

The defendants were arrested in Mexico between 2002 and 2004 and extradited in late 2008. A 2003 federal indictment calls them "second-level managers" of the cartel.

Last week, Jesus "Chuy" Labra, pleaded guilty in the same case. He was a top cartel leader until his arrest in 2000.