SACRAMENTO — Gov. Arnold Schwarzenegger and lawmakers scrambled Wednesday to avert a financial meltdown, and public officials across California braced for annihilating cuts on the day after voters trounced their leaders' rescue plan for the state.
Within two hours of returning from Washington, D.C., the governor huddled behind closed doors with Democratic and Republican legislative leaders to grapple with a projected $21.3-billion budget shortfall for the coming fiscal year and stop state government from running out of money by July.
But the Republican governor delivered at least a bit of good news: Obama administration officials had backed off their threat to rescind $6.8 billion in federal stimulus money.
The hacking of government began quickly, by the hand of a little-known state panel that sets elected state officials' pay. Citing a need for shared sacrifice, the group decided to reduce those salaries by 18% starting next year.
Otherwise, on a bright, clear morning in the capital, the most certain thing was the dark and angry mood of the voters. They had overwhelmingly rejected a package of ballot measures intended to produce about $6 billion through the middle of next year with taxes, borrowing and other means; limit future government spending; and bolster the state's rainy day fund.
Only a measure to punish elected officials by denying them pay raises in deficit years won approval -- easily.
Schwarzenegger, who alienated himself from fellow Republicans in February by reversing his pledge not to raise taxes, took the results as a mandate for the plan he unveiled last week to slash billions from education, healthcare, law enforcement and social programs, and to borrow $2 billion from local governments.
"The people told Sacramento, 'Go and do your work yourself. Don't come to us with your problems,' " Schwarzenegger told reporters in Washington before flying home. "So now we have to recognize that and move forward and make all of the changes through cuts."
There was a sense that the warnings this time, unlike some earlier ones, were real -- that state officials had no options left but to deliver devastating cuts that could force Californians to reconcile the desire for programs they have routinely approved by initiative with an insistence on limiting taxes.
