It's clear California can no longer help the state's neediest and poorest residents. In his last revised budget proposal as governor, Schwarzenegger called for no new taxes and rolled back state spending to 2005 levels.
With charts in hand, Schwarzenegger made a case for why he has to take such drastic steps to solve the $19 billion budget deficit. The governor and Republican lawmakers have vowed not to raise taxes, as the Legislature did last year, ensuring that spending cuts will be the main solution.
Schwarzenegger acknowledged the cuts will be painful, but said he has no other options because the state's tax revenue has plummeted.
"California no longer has low hanging fruits. As a matter of fact, we don't have any medium hanging fruit. We also don't have high hanging fruit. We literally have to take the ladder away from the tree and shake the whole tree," Schwarzenegger said.
The governor called for a total elimination of CalWORKS, the state's welfare-to-work program, and subsidized childcare for low income children outside pre-school, which would affect 142,000 children. Funding for in-home support care for the disabled and elderly will be cut by half, while local mental health services will be slashed by 60 percent.
Plus, premiums and co-pays will spike for Healthy Families, which provides health care to nearly 700,000 children from low-income families. And state workers will see another year of furloughs, this time one day a month.
The governor's proposed budget revision immediately drew protests.
Home care workers say they'll see wage cuts or layoffs if their program is gutted by half.
"He's supposed to represent us. He's supposed to represent the people of California. But by his budget, by his cutbacks, he's hurting the most vulnerable people," said home care worker Tony Venegas from Ventura County.
The disabled who benefit from home care held a silent protest. They say they're being treated like criminals and worry about losing their independence if their services are cutback.
"I have to go to a skilled nursing facility and it's like a roach motel. You check in, but you don't check out," said in-home care recipient Herb Meyer from Larkspur.
Democratic leaders vow to eliminate corporate tax breaks to save some programs.
"We refuse to wave the white flag," said Sen. Darrell Steinberg, D-Sacramento. "I am disappointed that the Governor has chosen to surrender. That he sees California as unfixable."
Democrats want to close tax credits and loopholes, noting that the state allows $50 billion worth of tax deductions.
While Democrats control both houses of the Legislature, Republican support is needed because of the two-thirds vote threshold required to pass a budget and tax increases.
The Associated Press contributed to this report.