SACRAMENTO - California Gov. Arnold Schwarzenegger and the state's legislative leaders spent more than three months - and one final, agonizing week - to find a way to plug California's $42 billion budget hole.
As painful as that process was, they now face a potentially tougher challenge: persuading voters to agree with their solution.
Schwarzenegger on Friday signed a package of 34 bills designed to close the shortfall, the end of a monthslong impasse that culminated in marathon sessions last week by the state's legislative leaders. But the budget compromise requires voter approval of five ballot measures during a May 19 special election.
The measures would set a cap on state spending and institute a rainy day fund, authorize the state to sell bonds based on future lottery revenue, shift money from certain social programs and guarantee billions more for schools.
A sixth measure, placed on the ballot as part of last-minute dealmaking to secure the final Republican vote, would be a constitutional amendment to freeze lawmakers' pay when the state runs a deficit. Another constitutional amendment, planned for next year, would create an open-primary election system.
The governor made no public comment Friday, but earlier said it was important to start campaigning and raising money for the budget-related measures immediately, since voters head to the polls in just three months.
"I think that it's very important that we start campaigning now, that we start educating the people and letting them know how important their partnership is again so that they help us and vote yes on those various different propositions," he told reporters Thursday, shortly after the Legislature approved the package.
The budget-balancing plan reduces the state's general fund spending by $13 billion for the rest of this fiscal year and approves a $96.3 billion general fund budget for the fiscal year starting July 1.
Asking the electorate to approve essential elements of the budget is "a giant wild card," said Mark Baldassare, president of the nonpartisan, nonprofit Public Policy Institute of California.
Baldassare said Schwarzenegger and lawmakers have their work cut out for them trying to sell their agenda to voters, who are worried about their jobs, houses and savings, and are fed up with political deadlock and partisan sniping.
Rejection of any of the revenue-related ballot measures will require lawmakers to plug that fiscal hole later in the year.
"The voters are in a very sour mood, a negative mood, about the direction of the state and the performance of both the Legislature and the governor around budget issues," Baldassare said.
Lawmakers said they had few other choices to close a $42 billion budget shortfall that had been projected through June 2010.
"Making the changes that we're doing to the Constitution require us to go to voters," said Democratic Assembly Speaker Karen Bass, one of the four legislative leaders who crafted the package with Schwarzenegger. "I just hope voters have the patience with us."
The compromise deal, which is intended to cover the state's spending needs through the rest of this fiscal year and next, cuts $15.1 billion from programs, primarily education, and raises $12.8 billion in revenue, mostly through increases in the sales tax, personal income tax and vehicle license fee.
Lawmakers also will rely on $11 billion in borrowing.
But Californians could be more receptive to the cuts and tax increases. A recent Public Policy Institute poll suggested voters understand a need for spending cuts and tax increases to solve the budget deficit, which exploded as tax revenue plummeted.
Some of the government reforms, such as the state spending cap, were praised by Schwarzenegger's office and Republicans who supported the compromise plan.
"If we'd had it for the last 10 years, we'd have about $12 billion in the bank to pay down debt," said Republican Assembly Minority Leader Mike Villines.
The other ballot measures would alter programs voters approved in previous elections: money for mental health programs and early child development, a statewide lottery and California's landmark education-funding law, Proposition 98.
With voters already skeptical about their state leaders, it might not take a high-dollar campaign to defeat the ballot measures, said Jon Coupal, president of the anti-tax Howard Jarvis Taxpayers Association.
He already opposes the spending cap because he believes the language leaves lawmakers too many loopholes to get around it. He said approving a questionable spending cap is not worth an extension of tax hikes, which would remain in effect through the 2013-14 fiscal year if voters approve the cap.
"We think it is an unprecedented assault on California taxpayers by politicians and special interests," Coupal said. "The taxpayers got virtually nothing out of this."
Associated Press writer Samantha Young and photographer Rich Pedroncelli contributed to this report.
Copyright © 2009 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.
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