With the federal courts demanding an end to the overcrowding, the governor said, the state's choice was stark: "We build more prisons or we release criminals.''
Senate President Pro Tem Don Perata (D-Oakland) said state officials would be smart to demonstrate that they had accomplished something with the money already approved, before going back to voters for more.
"If you want to give confidence to the voters to do more, fix a highway or two," Perata said.
Schwarzenegger's plan would prolong a recent spate of heavy borrowing.
The rule of thumb on Wall Street is that states should avoid borrowing so much money that repayment eats up more than 6% of their budgets.
California had never broken that barrier until this decade. By 2009, 8.4% of the state budget will go exclusively to paying off debt -- much of it the result of a multibillion-dollar bond sale that Schwarzenegger pushed in 2004 as a means to balance the budget.
"I'm extremely reluctant to entertain the idea of more bonding," said Assemblyman Chuck Devore (R-Irvine). "I'm very concerned that we'll get into a situation where future governors and legislatures will have an untenable debt and repayment burden."
Some of what Schwarzenegger proposed were not new ideas but a repackaging of old ones. In 2005, Schwarzenegger endorsed a ballot measure that he said would make California elections more competitive.
The initiative would have empowered a panel of retired judges to draw voting districts, removing the Legislature from the picture.
Voters defeated the measure. But Schwarzenegger is not giving up. He now wants a commission chosen by a panel of county clerks to draw the districts.
"In the past three election cycles, only four of California's 459 congressional and legislative seats changed hands," he said. "There was more turnover in the Hapsburg monarchy than the California system."
Times staff writers Evan Halper, Nancy Vogel, Dan Morain and Jordan Rau contributed to this report.
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Excerpts from State of the State speech
"We are a big state and we have big needs. And we made a big down payment. But the job is not finished."
"This is a test for those of us in this chamber.... Will the process turn into a pork-fest as it did in Washington with all the
"Our prison system is a powder keg. It poses a danger to prisoners, a danger to officers and a danger to the well-being of the public if -- as the federal courts have threatened -- we are forced to release prisoners because of overcrowding."
"One area where we definitely need the climate to change is the national government's attitude toward global warming."
"I propose that California be the first in the world to develop a low carbon fuel standard that leads us away from fossil fuels.... Let us blaze the way, for the U.S., for China and for the rest of the world."
"California's medical care, its medical knowledge, its medical technology is as strong and vibrant as a bodybuilder. Yet our healthcare system itself is a sick old man."
"That small child with the sticky hands starting the first day of kindergarten is the foundation of California's economic power and leadership. We must invest in education."
"Rebuilding California is not a burden. It is not a chore. It is a privilege.... It is a privilege to be able to help future generations fulfill their promise. And when they look back, they will see you in this room, and they will be grateful for what you have done."
"I am not asking you not to be a Republican or not to be a Democrat or to give up your principles. I am asking you to be Californians and to work out a solution that is the best possible answer to the challenges we face."
Source: Times reports