LOS ANGELES -- Gov. Arnold Schwarzenegger's rise to power six years ago in California's unprecedented recall election was accompanied by expectations that the state's infamously dysfunctional finances would finally be fixed. But now that voters have overwhelmingly rejected a slate of budget-balancing measures, the Republican governor faces a financial crisis even worse than the one he inherited. To Schwarzenegger, the underlying message in Tuesday's special election was clear: Californians want their elected officials to solve problems instead of turning to the ballot box for solutions. "Don't to come to us for extra help. That was the message," he said Wednesday. "And you know something? I appreciate that when you hear that from the people. It gives us a chance to go and adjust, and say 'OK, we went in the wrong direction. Now let's go in the right direction and let's go do what the people want.'" What the people want is the elimination of a $21.3 billion deficit _ nearly a quarter of California's general fund _ without additional tax increases. Figuring out how to accomplish that is likely to occupy most of Schwarzenegger's remaining time in office, crippling his efforts to build the legacy he desires. "The budget mess will overshadow everything else the governor does until he leaves office. The problem is so big that he can forget about major policy innovations," said Jack Pitney, a political science professor at Claremont McKenna College in Southern California. "He was hoping to revolutionize state government. He'll be lucky to avoid a complete collapse." Tuesday's setback at the polls became the latest blow for a celebrity governor who came to Sacramento promising blockbuster-sized reforms. Schwarzenegger vowed to end California's roller-coaster finances by running the state like a business and cutting through the political gridlock. His promises to tear up the state's credit cards and "end the crazy deficit spending" now seem like distant memories _ and impossible to accomplish before he leaves office in January 2011. Schwarzenegger has succeeded in borrowing billions of dollars for infrastructure projects and pushing through redistricting reform, but his major achievements may end there. A combination of political backbiting and financial reality already forced him to delay or cast aside many of his sweeping policy initiatives. Health care and education reforms have been defeated or scrapped. Rebuilding California's water system seems a longshot. Meanwhile, the recession gnaws at the state's image of resilience. Unemployment has climbed to a record 11 percent, home foreclosures continue apace, the commercial real estate market has cratered and much of the construction industry has ground to a halt. Within weeks, the budget crisis will transform from an abstraction in the minds of most Californians to a painful reality. The governor has proposed shortening the school year by seven days, eliminating health care for tens of thousands of low-income children, laying off up to 5,000 state employees and siphoning $2 billion from local governments. The shift of local money is likely to translate into reduced police and firefighting services, shortened library hours and neglected, trash-strewn parks. "To take money out of local government suggests what the state does is more important than police, fire, after-school programs and library programs," said Chris McKenzie, executive director of the League of California Cities. "The voters have made it very clear they want the state to stand on its own two feet." Tens of thousands of teachers also face the prospect of layoffs, and school officials are bracing for what they call unprecedented cuts. That is not the California that Schwarzenegger hoped to be shaping during his final year-and-a-half in office. He has spent most of the past two years in contentious budget negotiations, and the budget package he signed in February raised taxes by $12.8 billion, cut $15 billion from state programs and relied on $11 billion in borrowing. He has said he won't raise taxes again, setting the stage for clashes with state employee unions and other groups determined to protect their interests. In campaigning for the ballot propositions before Tuesday's election, Schwarzenegger tried to weave his own narrative in the face of likely defeat. He told audiences that the special election was not about his time in office or his legacy, but rather about California's future. That future now appears darker, at least in the short term. The scope of the crisis presages another prolonged budget fight for lawmakers who face a rarely met June 15 deadline to pass a balanced budget. With only a third of Californians approving of his job performance, Schwarzenegger has few bargaining tools remaining as he moves to address the same problems that compelled him to seek office six years ago. But the governor can shape the budget debate if he can reclaim his role as bipartisan peacemaker, said Kenneth Burt, political director of the California Federation of Teachers, which opposed parts of the ballot package. "He's obviously a lame duck, but he still has a role to play in bringing together the legislative leaders," he said. ___ Associated Press Writers Judy Lin and Samantha Young in Los Angeles and Kevin Freking in Washington contributed to this report.
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