Schwarzenegger releases Calif. budget

Gov. Arnold Schwarzenegger released a tightfisted spending plan Wednesday that he said would eliminate California's operating deficit for the first time in nearly a decade and clear the way for another round of borrowing for public works projects.

The $143.4 billion plan "is a prudent and realistic budget" that "lives within our means but still provides crucial services," Schwarzenegger said.

His plan would put the state five years ahead in paying off billions of dollars in borrowing voters approved in 2004 to bail out the state after the dot-com crash.

Early repayment would free state resources to cover $43.3 billion in new borrowing for construction of schools, prisons, dams and other projects that Schwarzenegger proposed Tuesday in his State of the State address. That would be on top of the $42.7 billion in bond spending voters approved in November.

Democrats said the budget would take too much away from needy residents by cutting nearly $500 million from the state's welfare program and diverting more than $1 billion from public transit.

The budget also would reduce funding for park maintenance, drug treatment facilities and higher-education outreach programs for minorities _ all priorities for Democrats.

Fiscal conservatives praised portions of the budget that called for setting aside more than $2 billion in reserves and for limiting spending.

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On the Net:

Governor's office: http://www.gov.ca.gov