Schwarzenegger gets a fiscal victory

SACRAMENTO, Calif. -- Gov. Arnold Schwarzenegger claimed the biggest victory of his young political career on Friday, when state legislators approved a fiscal reform package that will be placed on the ballot in March.

Coming just a week after the governor and the lawmakers seemed locked in a hopeless standoff, the bipartisan vote on Friday allowed Schwarzenegger, a Republican, to deliver on two of his major campaign promises: to end the partisan paralysis in Sacramento and to steer the state toward fiscal responsibility.

The package of changes does not resolve this year's looming budget problems, which include a shortfall of at least $14 billion that will require drastic cuts in state spending, new taxes or both. It also does nothing about millions of dollars in cuts in state financing for cities and counties beginning this month as a result of Schwarzenegger's repeal of an increase in the state fee for vehicle licenses.

Instead, the package deals with past problems and aims to prevent future ones. It includes a bond to finance $15 billion in debt that Schwarzenegger inherited when he took office last month, as well as a constitutional spending limit intended to prevent future overspending. It also forces state lawmakers to put money aside each year to be drawn upon in bad economic times.

Though there is no certainty that the changes will win approval by voters, their passage will be a top priority for Schwarzenegger and leaders of the state Legislature.

"In my swearing-in speech, I called upon the legislators to put aside 'politics as usual' and deliver a miracle of Sacramento for the people," Schwarzenegger said after legislators approved the package. "I am pleased and grateful they were able to do that this week and pass my California Recovery Plan. Our plan includes a balanced budget requirement to prevent our state from ever facing such a disastrous situation again. I urge the people to join us in putting California on the road to recovery by voting for our plan on the March ballot."

The package of changes overwhelmingly passed the 40-member state Senate on Friday, with only five members, all Republicans, voting against the spending limit and 12 members, also Republicans, voting against the bond measure. The package had passed the state Assembly by similarly large margins on Thursday night.

"This bill begins the process of ensuring California lives within its means," said Jim Brulte, the Republican leader in the Senate.

Most Republican opposition was based on fears that Schwarzenegger had made too many concessions to the Democrats and that the reform package was not tough enough, particularly in limiting spending.

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