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Schwarzenegger signs budget [UPDATED]

February 20, 2009 |  8:55 am

Updated at 2 p.m.: Gov. Schwarzenegger has signed the budget.

Updated at 12:44 p.m.: The budget signing has been delayed until 2 p.m.

Updated at 11:20 a.m.: The budget signing has been delayed until 1 p.m.

Gov. Arnold Schwarzenegger today signed the budget package passed by lawmakers that ended the state's slide toward insolvency and three months of Capitol gridlock.

The spending plan wipes out a nearly $42-billion projected deficit with tax hikes, deep program cuts and borrowing. It hinges on $5.8 billion contained in several ballot measures that voters must consider May 19 in a special election. The governor signed the budget at 2 p.m. in his Sacramento office.

Once that is complete,  state officials can again begin paying tax refunds, vendors and public assistance recipients, though those checks could be delayed several more weeks until there is enough money in the Treasury.

The budget's approval also allows road builders and local transit agencies to resume stalled construction projects. The budget would temporarily raise the state sales tax, starting April 1, by 1 cent on the dollar and nearly double the vehicle license fee, to 1.15% of the vehicle's value. The package would increase personal income tax rates by a quarter-point. A 12-cent-per-gallon increase in gasoline taxes that was initially part of the package has been eliminated -- replaced with federal stimulus money. The dependent credit that taxpayers can claim would be reduced by $210. An average family of four with an annual income of $75,000 would pay about $963 more a year in taxes, according to a legislative analysis.

-- Evan Halper