Schwarzenegger unveils financial recovery plan
Proposes vote on state spending limit
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California Gov. Arnold Schwarzenegger speaking to reporters during his first press conference Tuesday.
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CNN's Frank Buckley on California Gov. Arnold Schwarzenegger's first actions after taking office.
Schwarzenegger is officially sworn in as California's governor.
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(CNN) -- On his first full day in office, California Gov. Arnold Schwarzenegger Tuesday unveiled an ambitious financial recovery plan that includes cutting at least $2 billion from the state budget and asking voters to let the state sell up to $15 billion in bonds to consolidate its debt.
In a symbolic step to set the tone for his austerity plans, the multimillionaire film star said he would not accept his $175,000 annual salary as governor.
Schwarzenegger also urged legislators to repeal a controversial law allowing illegal immigrants to get driver's licenses and to give local governments $3.4 billion to make up for revenue from a car tax increase that he repealed by executive order Monday.
The new Republican governor said floating the bonds would be the only way to deal with the state's deficit without either cutting education or raising taxes, both of which he has promised not to do.
"I hate to do it, but this is our only choice," he said at a news conference. "We have to now do the kind of things to make good for the damage that has been done in these last few years."
Schwarzenegger asked legislators to put the bond issue on the March 4 presidential primary ballot, along with another constitutional amendment that would limit state spending.
"This is to prevent future financial disasters and will never again allow politicians to recklessly overspend," he said.
He also asked legislators to put on the March ballot his plan to reform the state's workers compensation system, which he said would reduce costs by $11 billion, along with a government sunshine measure that would increase public access to government information.
In order to get the referendums on the March ballot, the Democratic-controlled Legislature must approve them by December 5 -- just 17 days from now. But Schwarzenegger said he is optimistic that lawmakers will put aside partisan differences and act.
"I've visited all the Democratic leaders at the Capitol, and they all said to me, 'Arnold, we're going to work with you. We want you so succeed,'" he said. "I think the legislators know very clearly what the people want in California. They want to get rid of politics as usual."
"This was a message that was loud and clear from the people on October 7 [in the recall election]."
But Schwarzenegger also made it clear that he would appeal directly to the people to get legislators to act on his agenda.
"I need the people to help me accomplish my goals on their behalf. So I urge all the people to let their voices be heard. Write and call you legislators and let them know that you want action, and you want action now," he said.
He also said that he is comfortable letting the voters have the final say on the bond issue and other parts of his recovery plan.
"If they vote yes, that will be great. If they vote no, then we have to go and take on that challenge. It would be a whole new challenge then," he said.
Schwarzenegger did not unveil any specific budget cuts Tuesday, but said he would do so in the coming days, after discussing budget plans with legislative leaders from both parties. Nor did he outline how he would find the $3.4 billion to make up for revenues from repealing the car tax.
Budget cuts will be 'severe'
He cautioned that the budget cuts, when they are announced, would be "severe."
"I can guarantee you there will be at least $2 billion in budget cuts," he said.
Schwarzenegger also said he will follow through with plans to lay off state workers -- plans drafted by the man he ousted from office, former Gov. Gray Davis. However, he promised that no one would be laid off before Christmas.
He also said that depending on the details of the budget now being hashed out, the bond issue could turn out to be less than the $15 billion he said is the upper limit.
The law allowing illegal immigrants to obtain driver's licenses was signed by Davis in the middle of the recall campaign, and critics charged it was an effort to curry favor with Hispanic voters. Schwarzenegger opposed the measure, saying allowing undocumented aliens to have licenses poses a security risk.
Schwarzenegger was asked Tuesday if he might consider letting the legislature change the law to address those security concerns, rather than repealing it.
He said he wants an outright repeal of the law, but he indicated he might be willing to revisit the issue if safeguards could be put in place.
