Schwarzenegger says he won't back Democratic budget plan

Schwarzenegger, who for weeks has exhorted lawmakers to act to forestall a cash crisis, vowed to veto the package after Democrats used a series of legal maneuvers to push through $9.3 billion in taxes without any GOP votes. He called on legislators to return to the negotiating table.

It was not the taxes -- or the tactics Democrats used to pass them -- that Schwarzenegger said troubled him. He complained the plan did not go as far as he wanted to stimulate the economy.

"I need exactly what I recommended [for my] recovery package," he told reporters an hour after the Senate and Assembly concluded voting following a tense legislative session. "I think they should stay here, work some more on this budget."

Schwarzenegger said the Democratic plan -- which would speed up financing for more than $3 billion in public spending on construction related to hospitals, streets, housing, flood protection, parks and transit -- was "bogus." He said the state also needs to ease environmental rules that can delay such projects and allow a greater role for private contractors in public building.

He also complained that it did not include an additional $1.2 billion in cuts to the state workforce and welfare programs.

"They thought I would sign it, that they could put the pressure on," he said.

The governor's move comes as the state is projected to run out of cash as early as February. And it came a day after the state's financial straits forced officials to stop payments for nearly 2,000 public works projects. The suspension of that money could make it impossible for lawmakers and Schwarzenegger to jump-start construction even if the stimulus measures the governor seeks are passed.

Democrats accused the governor of keeping the state in financial jeopardy over fringe issues. The projects that Schwarzenegger would like to see privatized or fast-tracked and the program cuts he wants implemented, they say, make up only a tiny fraction of overall state spending.

"We gave him an $18-billion gift, and he tossed it down the toilet," said Sen. Mark Leno, (D-San Francisco). "This is more about his ego than what is good for the state."