Calif. voters approve $15 billion bailout

2 budget measures seen as Schwarzenegger win

March 03, 2004|By Michael Finnegan | Michael Finnegan,LOS ANGELES TIMES

SANTA MONICA, Calif. - California Gov. Arnold Schwarzenegger was closing in on a resounding vote of confidence yesterday with early returns showing state voters passing two ballot measures that are cornerstones of his plan for recovery from the state fiscal crisis.

Proposition 57 authorizes the state to borrow $15 billion to balance the budget. Most of that would refinance previously approved debt that is under court challenge, but roughly $4 billion would be used to close current and future budget gaps, according to the nonpartisan legislative analyst's office.

Proposition 58, often described by Schwarzenegger as a device to shred the credit card of politicians unable to control spending, would restrict future borrowing to cover deficits, require balanced budgets and mandate a rainy-day reserve. Critics say it is riddled with loopholes.

Schwarzenegger pressed his case for both measures in millions of dollars of television ads that went unanswered by critics.

The absence of a tight presidential primary in California had left Schwarzenegger's ballot measures - and their implications for his future - the main event in the state's primary election.

"I love it when the people go to the polls and flex their muscles and let their voices be heard," Schwarzenegger said. "Together we can accomplish anything."

Swept into office five months ago in the recall, Schwarzenegger assembled an extraordinary coalition of Democrats, Republicans and disparate interest groups to campaign for Propositions 57 and 58. Republicans saw the measures as better than raising taxes; Democrats hoped their passage would avert what Schwarzenegger called "Armageddon" budget cuts.

For Schwarzenegger, approval of the measures would enhance his already strong standing with the Legislature. He has threatened to call for a popular vote on matters where lawmakers thwart his will; rejection of the measures could have diminished the tactic's potency.

The Los Angeles Times is a Tribune Publishing newspaper.

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