After weeks of wrangling, Gov. Arnold Schwarzenegger has made a deal with state lawmakers to close the $26 billion hole in California's budget, the Sacramento Bee reports. Leaders believe the plan—which involves massive spending cuts and borrowing from city governments—is solid enough to secure billions of dollars in short-term loans, allowing the state to stop issuing emergency IOUs.
"We came to a basic agreement, a budget agreement that, of course, has to be ratified by the legislature," Schwarzenegger said after hours of negotiations he likened to "a suspense movie." The plan, which includes three controversial furlough days a month for all state workers and California's first new offshore oil project in over 40 years, is expected to leave the state with multi-billion-dollar deficits for many years to come.