California legislative leaders challenged the legality of Governor Arnold Schwarzenegger's line-item vetoes of a budget bill passed in July aimed at closing the state's serious gap.

California legislative leaders challenged the legality of Governor Arnold Schwarzenegger's line-item vetoes of a budget bill passed in July aimed at closing the state's serious gap. The governor made the vetoes, stating that legislators approved a budget with a "$156 million negative reserve" because they rejected two measures to raise revenue, one to take gas tax money from local governments and the second to allow drilling off Santa Barbara. Schwarzenegger also insisted the budget include a $500 million reserve, so he vetoed $489 million in line items. Assembly Speaker Karen Bass said the vetoes will have "catastrophic effects on children, domestic abuse victims and seniors." Senate President Pro Tem Darrell Steinberg said the budget revision package included a satisfactory reserve. "We question whether the majority of these vetoes are legal. This is not the last word." The state had issued 209,000 IOUs worth $1.08 billion by the end of July.