California lawmakers OK patch for budget

SACRAMENTO, Calif. — California lawmakers, after a 20-hour session, approved a budget package Friday that would close most of the state's $26.3 billion deficit with deep, broad cuts to state government.

Gov. Arnold Schwarzenegger said he would sign the legislation next week even though the Assembly rejected key provisions that left it short by nearly $1.1 billion.

The portions of the package that did not survive included a proposal for the first new offshore-oil drilling in four decades and another to borrow gasoline-tax revenue that belongs to local governments. The potential raid of local funds almost scuttled the entire budget deal early Friday.

The governor said he was proud of the package, which consists of about 30 bills amending the budget put in place in February. He said he would make up the loss from the failed measures by taking it out of a cash reserve and by using his veto pen to make additional cuts.

"I know that college students will pay now higher tuitions," he said Friday. "I know that teachers will be laid off. I know that our state workers will get less money. But we have to do that. It's the only way to solve the problem and to save our great state."

Once signed, the budget solution is expected to end the immediate crisis that forced the state to issue hundreds of millions of dollars in IOUs to residents and businesses and caused its credit rating to drop close to junk status.

The budget agreement will be felt in nearly every community of the nation's most populous state.

Cuts to public schools are expected to force teacher layoffs, more crowded classrooms and scaled-back offerings in art, music and sports.

College students will pay hundreds of dollars more a year in fees, course offerings will shrink and tens of thousands of prospective students will be turned away.

Welfare, health-care programs for low-income families and in-home services for the disabled and elderly will be reduced. Nearly 40,000 will have their in-home support services terminated.

Even state workers, long protected by powerful public-employee unions, will be affected. Schwarzenegger has ordered them to take three days off a month without pay, equating to a 14 percent pay cut.

An undetermined number of state parks will close after Labor Day, and the state will be authorized to sell 17 state office buildings to raise cash, renting the space back from the new landlord. The Orange County Fairgrounds also will go on the market.

When Schwarzenegger signs the budget agreement, state officials hope it will be enough to satisfy the bond markets and allow the state to begin taking out short-term loans.

The state's largest employee union, representing 95,000 workers, is asking its members whether they want to authorize a strike or walkout to protest monthly furloughs.