LOS ANGELES – California’s legislature agreed Friday to allow Republican Gov. Arnold Schwarzenegger to seek voter approval for $15 billion in borrowing and a ballot measure that would limit spending, two steps he said are urgently needed to end the financial crisis engulfing the nation’s most populous state.
In a decisive show of support for the new governor, and with rare bipartisan spirit, the financial recovery plan passed with ease in both houses of the Legislature, which is controlled by Democrats.
“I am a happy governor because this is a new day for California,” Schwarzenegger said Friday night as he signed the package.
Schwarzenegger and Democratic leaders reluctantly made an assortment of compromises during marathon talks this week to craft the plan. Then he persuaded skeptical conservative Republican lawmakers to back it.
They had little time to spare. California is saddled with a deficit exceeding $14 billion, its economy lost another 14,000 jobs last month, and Wall Street dealt the state another significant blow this week by lowering its already beleaguered bond rating to rock-bottom levels.
Schwarzenegger’s first attempt to get the plan approved was soundly rejected by both liberal Democrats and conservative Republicans a week ago – even though he had warned that “failure is not an option.”
Afterward, he threatened to bypass the legislature and launch a petition drive to get his proposals on the ballot next year. But he decided to continue negotiating and wound up brokering a deal that he and many lawmakers said was less than what they wanted, but fair.
The movie star turned governor, who took office last month, emerged from the budget debate praising the Legislature, saying it had set aside partisanship and “taken the first step to put California back on sound financial footing.”
Democratic leaders credited Schwarzenegger for taking an aggressive but amicable approach to the budget talks and for showing political pragmatism.
“We got to work out one tough issue, and we can possibly work out other tough issues,” said Democratic state Senate President Pro Temp John Burton. “We gave a little bit, and he gave somewhat. It was better than it could have been. It was worse than it could have been. It was a true compromise.”
Now, Schwarzenegger has to sell it to voters – and he could face formidable obstacles getting it passed.
Schwarzenegger’s plan is scheduled to appear on the March ballot. If approved, it would rely on borrowing to wipe out the nearly $11 billion deficit he inherited upon taking office and the nearly $4 billion he just added to it by repealing the tripling of car taxes that his predecessor, Democrat Gray Davis, imposed this year. The plan would put new spending restrictions on the Legislature, including a future ban on the kind of borrowing that Schwarzenegger now wants to do. It would also force lawmakers to create a reserve fund to deal with any future budget shortfalls.
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