California budget passed, awaits signature
After an overnight session, California lawmakers pass a budget package that closes the $42B gap.
Atlanta (CNN) -- California lawmakers in Sacramento passed the state's budget -- closing a $42 billion deficit -- early Thursday, and it now awaits the signature of Gov. Arnold Schwarzenegger, who hailed the lawmakers.
The budget package includes tax increases, spending cuts and borrowing to close the deficit.
It was first approved by the state Senate during a grueling overnight session after lawmakers there agreed to demands from a holdout Republican senator. It was then passed speedily by the Assembly.
"I am extremely proud of the members of the legislature, both Republicans and Democrats, who had the courage to stand up and put the needs of Californians first," Schwarzenegger said in a statement.
"Rather than approaching this unprecedented crisis with gimmicks and temporary solutions, we took the difficult but responsible steps to address our entire $42 billion budget deficit and pass historic bipartisan reform measures."
Schwarzenegger said he was pleased that the legislature that his budget proposal served as a blueprint for this spending plan, which included "spending reductions, revenue increases, economic stimulus and government efficiency."
"This is a very difficult budget, but we have turned this crisis into an opportunity to make real, lasting reforms for California."
There had been a stalemate over budget, and it caused Schwarzenegger to declare a fiscal emergency and send layoff notices to 10,000 state workers.
Democrats in the Senate needed one Republican vote for passage. Sen. Abel Maldonado had been one Republican amenable to vote for the measure in exchange for various demands and lawmakers worked to meet them in order to get his support.
Senators voted to approve Maldonado's demands to revise the state's constitution to permit open primaries for legislative, congressional and gubernatorial elections. They also passed another, the removal of a 12-cent additional gas tax increase.
Even though several members didn't like the open primary plan, they still voted for it in order to get the budget passed.
Speaking on the Senate floor, Maldonado said the passage of the budget is imperative for people across the state, even if it would imperil his political career.
"This might be the end for me, but this vote ensures that it's not the end for the state of California. I'm asking for an aye vote."
While he said it's an "ugly budget" and "takes a lot away" from California, he stressed that it keeps people working, keeps the state solvent and reforms California.
"For many Californians, this budget is real life and death situation," Maldonado said. "This budget is about shared pain and shared sacrifices."
State Senate President Pro Tem Darrell Steinberg, D-Sacramento, urged lawmakers to pass the budget during a news conference just after midnight.
All Democrats were prepared to vote for the budget, but one more Republican was needed to reach a majority vote, Steinberg said.
"We need one more member. One more member. We need one more," said Steinberg, raising his voice as he pointed to a large placard with the number 1 written in red. "My door is open for any Republican that wants to put the state first."
U.S. Sen. Barbara Boxer, D-California, also was there Wednesday morning and reminded lawmakers that Democrats in the U.S. Senate were able to get just enough Republican votes to pass President Barack Obama's $787 billion stimulus plan.
"We have to put aside all this ego and put the people of California first," Boxer said. "The people of California do not deserve the fate they will receive if it is not passed."
Lawmakers said, without a new budget, 276 public works projects will be halted Thursday, an additional 10,000 state workers could receive layoff notices and California may not receive parts of the federal economic stimulus package.
The Republican governor has butted heads for months with the Democratic majority over easing the state's $11.2 billion revenue shortfall this fiscal year alone. Cuts would save California $750 million for the year. The state faces a $42 billion deficit for the current and next fiscal years. 
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