Voters kill budget measures

SACRAMENTO —  California voters delivered a potent defeat Tuesday to Gov. Arnold Schwarzenegger and Capitol lawmakers, dismissing a slate of ballot measures they had championed as a way to fight the state’s latest deficit crisis.

Just one of the half-dozen measures passed in a special election marked by meager voter turnout: Proposition 1F, which bans salary hikes for Sacramento politicians in deficit years like this one.

Proposition 1A offered government-trimming spending limits but irked fiscal conservatives by extending tax increases. And Proposition 1B would have restored money cut from schools but was tied to approval of 1A.

Three other measures -- Propositions 1C, 1D and 1E -- had promised a quick infusion of nearly $6 billion this summer to help reduce the state’s staggering budget deficit.

The drubbing came from all corners of the state. Mounting returns showed Proposition 1A, for instance, losing in all of California’s 58 counties.

Schwarzenegger, who lost a similar ballot battle in 2005 and had staked a piece of his legacy on Tuesday’s election, said in a statement that he respects “the will of the people who are frustrated with the dysfunction in our budget system.”

Now, he said, “we will come together to begin to develop a budget solution that gets our state back on track.”

Other boosters of the measures lamented the outcome, and largely blamed voter confusion. “I am disappointed,” said Assembly Speaker Karen Bass (D-Los Angeles). “The message from voters is they want us to fix it. They did not understand we needed their help.”

Anti-tax activists called the propositions’ rejection a defeat for what they characterized as the tax-and-spend status quo.

“People aren’t dancing in the street over this; they’re tired and disgusted over all that’s gone on,” said Jon Coupal of the Howard Jarvis Taxpayers Assn. “Maybe now our governor and Legislature will get the message.”

The ballot measures were conceived by the governor and legislative leaders in February as a means of keeping the state’s books balanced well into 2010. But by the time voters arrived at the polls, the propositions offered only a dent in a projected deficit for the coming fiscal year that had swollen to $21.3 billion amid plunging tax collections.

The state once again faces a cash crunch so severe that it may not be able to pay bills come July. With the election wrapped up, the Legislature and Schwarzenegger will now turn their full attention to keeping California solvent.

The “big five” elected leaders -- Schwarzenegger and the legislative chieftains from both houses -- are slated to begin closed-door meetings today upon the governor’s return from Washington, where he spent election day after casting a last-minute absentee ballot.

On Thursday a small group of Senate and Assembly members will hold the first of what’s expected to be a slew of daily public sessions to wrangle over the details of the budget.

Schwarzenegger has called for cuts that would hit every corner of the state. He announced plans to lay off 5,000 of the state’s 235,000 workers and has proposed slashing education by up to $5 billion, selling state properties, borrowing $2 billion from local governments and potentially reducing eligibility for healthcare programs.

Los Angeles Mayor Antonio Villaraigosa predicted that the city’s budget could take a hit -- but he vowed a fight: “I’m going to do everything I can to protect the city coffers.”

Worst-case scenarios also call for the release from state prisons of up to 19,000 illegal immigrants, who would face deportation, and the transfer of up to 23,000 other prisoners to county jails.

The governor also wants to borrow up to $6 billion, but awaits word on whether Washington would guarantee those loans. The White House has never done so for the state but is considering the action as Wall Street expresses concern that California could become a deadbeat borrower.

In a bid to salt those prospects, Schwarzenegger met privately Tuesday in the U.S. Capitol with members of California’s congressional delegation. “We have a major problem in California, and I think if we work together, we can make it through this crisis,” he told reporters after attending the White House announcement on tougher vehicle emission standards. “We need assistance. . . . I didn’t come for any bailout. We’re going to make the necessary cuts.”

Afterward, the lawmakers appeared split over the idea of a federal backstop for state borrowing, said Rep. Dan Lungren (R-Gold River). And some saw irony in Schwarzenegger’s appearance in Washington while voters decided the fate of his ballot package back home.

“If the governor thought that the initiatives were going to win a smashing victory, he’d be in California right now,” said Rep. Brad Sherman (D-Sherman Oaks).

Though he stepped squarely into the spotlight in the days before the election, Schwarzenegger had largely stuck to the wings during the three-month run-up to the vote.

The campaign for the measures hit hard with mailers, TV and radio ads early on, but the message shifted dramatically in the final weeks. Earlier, backers emphasized fiscal responsibility. But in the last stretch, the commercials tilted toward fears that the cash crunch would cut into critical services.

Schwarzenegger helped behind the scenes to garner big contributions for the measure’s proponents, who raised about $30 million and outspent foes by nearly 10 to 1. Among the big contributors were businesses hoping to avoid tax increases if state finances slumped further: oil companies, tobacco and alcoholic beverage firms, sports teams and Hollywood studios.

Despite a big advantage in cash and manpower, the campaign failed to gain traction from the start. Polls throughout the race showed all the ballot measures -- except Proposition 1F -- losing badly, as voters expressed equal parts confusion over the package and disdain for the Sacramento politicians who crafted it.

Californians seemed upset partly by Sacramento’s call for more money at a time when employment was sagging, retirement accounts were plunging and the average resident was struggling. Others expressed irritation at being called back to the polls just months after a presidential election.

The short campaign also created confusing bedfellows in support and opposition to the ballot measures.

Schwarzenegger joined with liberal Democrats and the California Teachers Assn., the group that helped defeat a 2005 ballot package championed by the governor. Foes of Proposition 1A, meanwhile, included several unions, which didn’t like the effect spending limits could have on the state workers they represent, and anti-tax groups that hated its extension of tax increases.

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Times staff writer Phil Willon contributed to this report.