California Governor Arnold Schwarzenegger has signed a recovery package intended to resolve his state's financial crisis. The California assembly overwhelmingly passed the measure Thursday, and the state senate approved it by a narrow margin Friday. The compromise agreement is the first major victory for the new governor.
Mr. Schwarzenegger, a Republican, was elected October 7 in a recall election that ousted Democrat Gray Davis. Voters looked to the action star to solve California's serious fiscal problems.
The new bill is a bipartisan effort to do that. Its centerpiece is a $15 billion bond measure that will meet California's immediate debt. The state will repay the funds within nine years.
Democratic assembly member Jackie Goldberg says the compromise will satisfy current obligations and provide a surplus fund for emergencies.
"Do I think it's elegant and perfect? No. But it does the three things that the governor wanted. He wanted a rainy day fund. It gets him that," she said. "He wanted a cap on spending. It doesn't give him a cap on spending, but it says you can't spend more than you take in. That's a cap on spending in this state."
The measure also authorizes the crucial bond issue, although it must be repaid sooner than the governor had wanted.
Some of Mr. Schwarzenegger's fellow Republicans were hoping for stricter limits to prevent a return to deficit spending. The state Senate passed the bond measure passed by the minimum vote required, 27-12. All of the opposition came from the governor's fellow Republicans. However, Senate Republican leader Jim Brulte argued for the bill's passage, saying that it is "better than the current situation."
Democratic assembly member Sarah Reyes says Mr. Schwarzenegger, with less than one month on the job, is learning how things are done in politics. "He's now learning how to negotiate with the other side of the aisle, and I'm just glad to say that we have a product today of those negotiations," she said.
The California recovery package must still be approved by voters. It will appear on the ballot next March as a referendum item.