"Schwarzenegger Acknowledges Tough Budget Times"

MADELEINE BRAND, Host:

It's MORNING EDITION from NPR News. I'm Madeleine Brand.

BRAND: fighting budget deficits. And this morning, we'll listen in to three governors who gave their State of the State addresses.

BRAND: And we begin in my home state, California, where Governor Arnold Schwarzenegger told a story about his family pets. Yes, it's California. They include a pony and a pig. He said they work together, the pony and pig, to pry open containers of dog food. And if they can work together, Republican and Democrats should, too. John Myers of member station KQED has the first of our three reports.

JOHN MYERS: Arnold Schwarzenegger likes to boil down complicated issues into simple themes, and he did so again in his final State of the State address before being termed out of office.

ARNOLD SCHWARZENEGGER: If I had to summarize in one word our focus for the coming year, it would be the word priorities. We have to get them straight, and we have to keep them straight.

MYERS: Of course, tax credits cost money, and Democrats wonder how the deficit-plagued state will pay for them. Democrat Karen Bass is the speaker of the California State Assembly.

KAREN BASS: I don't think that this year is the year to expand tax credits, frankly.

MYERS: Bass says a better plan would be repealing more than a billion dollars in tax breaks for big business, which were included in the state budget in 2009. That budget debate was contentious and, Schwarzenegger says, another example of what needs to change. The governor called on legislators to again consider reform of the budget process and spoke of its problems as though he were an outsider.

SCHWARZENEGGER: The budget crisis is our Katrina. We knew it was coming. We have known it for years. And yet Sacramento would not reinforce its economic levees.

MYERS: A recent visible sign of the budget mess has been the anger coming from California colleges and universities, where students have protested double- digit tuition hikes and caps on enrollment. Again, speaking almost as though he had not been governor the last six years, Schwarzenegger borrowed a line from his critics that California now spends more on prisons than it does on higher education.

SCHWARZENEGGER: What does it say about our state, what does it say about any state that focuses more on prison uniforms than on caps and gowns? It simply is not healthy. So I will submit to you a constitutional amendment so that never again do we spend a greater percentage of our money on prisons than on higher education.

(SOUNDBITE OF APPLAUSE)

MYERS: For NPR News, I'm John Myers in Sacramento.