Schwarzenegger signs California budget after epic battle

Other News Materials 24 September 2008 05:57 (UTC +04:00)

( dpa ) After an 80-day battle with legislators, California Governor Arnold Schwarzenegger on Tuesday signed a 143- billion-dollar state budget that ended a spending impasse in the richest and most populous state in the US.

The budget makes up California's 15.2-billion-dollar deficit with a combination of cuts and increased revenues and includes special provisions for a rainy-day fund intended to smooth out fluctuations in state tax revenue.

"While California is certain to face a difficult budget situation again next year, this budget does not take money out of people's paychecks, and it includes real budget reform with teeth," Schwarzenegger said.

"These budget reforms, when approved by voters, will finally put California's budget on a path toward long-term fiscal stability."

The budget had seen its longest-ever delay as Republican and Democratic lawmakers sparred over ways to deal with the deficit, with Democrats wanting to raise taxes and Republicans advocating widespread cuts in services. The stalemate prevented the state from making payments to thousands of vendors, including schools, nursing homes and kindergartens.

State Controller John Chaing, a Democrat who has sparred with Schwarzenegger over efforts to control spending, said that the budget "was out of balance the moment it was signed."

"This budget dooms those most harmed by the record-setting budget stalemate - students on financial aid, nursing homes, child care centers and other providers of critical public services - to relive the same nightmare next year," Chaing said in a statement.