The California Legislature passed a long-awaited budget early Thursday after an epic battle that involved several all-night sessions, sending the governor a bill that raises taxes and cuts spending to help close a $42 billion deficit.
Gov. Arnold Schwarzenegger, a Republican, praised the bill, passed by the Democratic-controlled Senate and Assembly. He came out of his office after the budget vote and disconnected a large deficit clock counting the number of days—106 as of Thursday—that the Legislature had failed to act since he declared a special session to deal with the state's fiscal problems.
"I'm absolutely delighted about the budget passing," Schwarzenegger said outside his office.
The budget deal flew through the Assembly less than an hour after it won approval by a single vote in the Senate after late-night horse trading to win over a final Republican vote.
The package included a combination of spending cuts, tax increases and borrowing, intended to close a projected multi-billion dollar deficit and avert fiscal disaster for the state.
Senate leaders secured the final vote needed from moderate Republican Abel Maldonado in late-night negotiations by agreeing to his demands for election changes, government reform and removal of a gas tax increase, giving them the two-thirds vote needed to pass the package.
Watch the video below to see what CNBC's Jane Wells has to say about California's budget battle.