SACRAMENTO (AP) " Gov. Arnold Schwarzenegger on Thursday revised the budget proposal he released before Tuesday's special election, ending plans to ease the deficit with borrowed money.
He called instead for greater cuts to children's health care, college loan assistance, state parks and other programs.
The move was a direct reaction to Tuesday's special election, when voters rejected five budget-related measures that relied on borrowing, funding shifts and higher taxes.
Schwarzenegger said the voters were telling lawmakers to live within the state's means without resorting to borrowing and gimmicks that shift money from one fund to another.
"There's one thing for sure, there will be no revenue increase," Schwarzenegger told reporters during a news conference following his appearance at a capital prayer breakfast. "It means cuts, cuts, cuts and living within our means. That is the message of the people."
California also faces a practical problem if lawmakers were to consider more borrowing to deal with the state's $21.3 billion deficit: Its credit rating is the worst of any state, leading to high borrowing costs.
The state treasurer's office estimates that California would pay an extra $500 million to $1 billion in lender fees on a $15 billion short-term loan.
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