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The plan would also cut health care coverage for one million low-income children and reduce funding to state universities by $335 million. Funding for courts would be slashed by 10 percent.
The state is facing the worst budget crisis in its history, and the governor and legislature have to find ways to cut $23 billion dollars in four weeks.
"It's basically, when it comes to revenues, a freefall right now," said Gov. Schwarzenegger. "We don't know when this is going to stop. Even while we're going to negotiate the budget in June, we don't know if that doesn't create, during that time, another $3 billion deficit."
Democrats are not happy with the plan.
The governor says it pains him to propose the cuts, but says he's responding to the voters' message in last week's election by cutting spending and not raising taxes.