your connection to The Boston Globe

Voters back governor's plan to borrow $15b for budget

LOS ANGELES -- Californians overwhelmingly approved a plan yesterday to borrow a record $15 billion to bail out the state budget, handing Governor Arnold Schwarzenegger a crucial victory in his bid to turn around the world's sixth-largest economy.

A companion measure that would require a balanced budget also easily passed. Both measures had to be approved for either to take effect.

With 15 percent of precincts reporting, the borrowing plan -- Proposition 57 -- was favored by 61 percent of voters.

The totals included absentee ballots, which traditionally reflect more conservative voters. Schwarzenegger has used his celebrity and his political capital to try to build support for the bond measure, the centerpiece of his plan to solve the state's financial woes without what he warned would be "Armageddon" budget cuts or higher taxes.

The bond measure -- the nation's largest ever to appear on a statewide ballot -- would be used to refinance California's debt and help close next year's budget gap.

The success or failure of Proposition 57 was seen as the biggest test yet of Schwarzenegger's influence with the voters who swept him into office in a recall election just five months ago.

"One of the reasons Schwarzenegger is wielding so much political influence is his perceived impact on the electorate -- his ability to communicate and take matters directly to the people," said GOP strategist Allan Hoffenblum.

Schwarzenegger voted yesterday morning at a recreation center near his Brentwood home. "It is very important for people to support this because it will save the state and it will get us back on track to fiscal recovery," he said.

The movie star-turned-governor had been barnstorming the state in support of the bond measure.

Last week, he held a rally at Universal Studios with actor Rob Lowe. On Monday, he went to Jay Leno's "The Tonight Show" to tout the bond measure alongside the man he ousted -- former Democratic governor Gray Davis.

Backers warned of a potential financial meltdown if the bond failed, though the state still had the possibility of a backup $10.7 billion bond issue now in the courts on a legal challenge.

State lawmakers can also roll $14 billion in short-term state debt into the new fiscal year, as they have done the past two years.

Two other issues were on the ballot. Proposition 55 would sell $12.3 billion in bonds to pay for new and improved schools, and Proposition 56 would lower to 55 percent the support needed in the Legislature to pass a budget. Currently, budgets need at least two-thirds support. Both measures were trailing in very early returns.

The deficit bond and school bond issues would raise California's long-term debt to about $59 billion.

Today (free)
Yesterday (free)
Past 30 days
Last 12 months
 Advanced search / Historic Archives