California Lawmakers Approves Schwarzenegger-Endorsed Budget

SACRAMENTO, Calif. (AP) — California’s long budget fight is over.

Lawmakers approved a $143 billion spending plan and gave in on Governor Arnold Schwarzenegger’s demands for a more robust rainy day fund.

Schwarzenegger says “there’s nothing to really celebrate,” but he is pleased that legislators agreed to stronger controls on the rainy day fund and gave him authority to make spending cuts during the year.

The impasse dragged on because Republicans opposed any tax increase, while Democrats sought to combine budget cuts with higher taxes on corporations and the wealthiest Californians. Schwarzenegger proposed a temporary 1-cent increase in the state sales tax that would drop after three years.

Schwarzenegger says he’ll sign the compromise plan next week. That will allow California to resume payments to schools, medical clinics and state vendors. They haven’t been paid since the start of the fiscal year July 1st.