Schwarzenegger signs CA budget

July 28, 2009 11:47:06 AM PDT
Gov. Arnold Schwarzenegger is making another $656 million in cuts to build a reserve fund for California as he signs the state's new budget. Schwarzenegger cut spending on child welfare, health care for the poor and AIDS prevention Tuesday. He signed a package of bills aimed at balancing the state's $85 billion budget through June 30, 2010.

Schwarzenegger says the plan forces California to live within its means, but it makes severe cuts to government programs from schools to prisons.

The governor and lawmakers came up with a revised spending plan last week to close a $26 billion deficit. They hope it will allow the state to stop issuing IOUs.

The governor wanted a cash cushion after the Assembly rejected about $1.1 billion in revenues from local transportation funding and new oil drilling.