California voters soundly rejected two ballot initiatives Tuesday that would have banned the collection of racial information in public education, contracting and employment and would have set aside a portion of the budget for infrastructure repairs.

Early returns showed that 56 percent of voters said no to Proposition 54, the Racial Privacy Initiative, while just 43 percent supported it. Polls had indicated steadily declining support for the measure in the months and weeks before the vote. Historically, as initiatives near Election Day, support declines.

"We have this victory on Proposition 54," said Lt. Gov. Cruz Bustamante, who lost the replacement portion of the ballot to Arnold Schwarzenegger. "Californians rejected Proposition 54 because they agreed we can’t afford to put our health and citizens at risk. Californians rejected Prop. 54 because they believe that discrimination is wrong in California. We must create a colorblind society, but we can't do that by putting blinders on government."

Early polling showed Proposition 53 (search), the initiative that would have earmarked 3 percent of each year's state budget into a fund to fix roads, bridges and sewage plants, losing 65-35 percent. The funds would have amounted to $70 billion over 20 years to accommodate California’s 35 million people.

"People don't think about their roads and their water systems under the best of circumstances, and it's even harder to engage them when there's something far more interesting," said pro-Prop. 53 spokesman Dan Pellisere.

Propositions that allocate chunks of the state budget to specific causes have had mixed success. Critics of Prop. 53 say that while the state’s infrastructure certainly is in need of attention, this measure is not the answer because it would drain money from health care, education and other state programs.

The effort to enact Prop. 54 was led by Ward Connerly, a University of California regent who in 1996 led the push for Proposition 209 (search), the successful campaign to ban racial preferences in California.

From the beginning, Connerly and his allies had trouble raising funds for the effort. The initiative also suffered from low voter awareness. Before the results were in, Connerly acknowledged the uphill battle, quipping that Tuesday night's "victory party" would better be dubbed a wake.

After the defeat, he added that he is waiting for the day to come "when the American people will not be divided into racial categories."

"And we can look back on this period as the beginning of that process," he told supporters in Sacramento as part of a concession speech.

Questions on ethnicity and race can be found on state forms to enroll a child in public school, apply for a city or county job and conduct a whole host of business with the state. State questionnaires ask not only whether an individual is black, white, Hispanic or Asian, but also whether he or she is Laotian, Guamanian or any other of the 16 classifications now used.

Connerly, who is of mixed race and dislikes being classified himself, said last month, “We believe that the first step towards a color-blind government is for the government to get out of the racial bean-counting business.”

But opponents of Prop. 54 were concerned that by no longer collecting statistics on race, it would be impossible to determine discrimination in employment or college admissions. Another worry was that without race statistics, evidence of medical trends, such as the increased susceptibility of blacks to sickle cell anemia (search), would remain mysteries.

Among those who fought against the measure were medical organizations, such as the American Public Health Association (search), the California Academy of Physicians, the California Black Health Network and the California Medical Association.

"The fundamental issue is that if you don’t know the numbers, you can't craft solutions for the problems," said Dr. Georges Benjamin, executive director of APHA. He cited infant mortality in the African-American community, which is much higher than among whites, as a problem difficult to solve without gathering data.

Prop. 54 would have allowed racial classification for medical research, but Benjamin called that provision insufficient. Collecting data on voluntary research subjects would not protect the data-collection systems that are currently used, which rely on much larger sample groups.

Proponents of the initiative called this argument a “red herring” and said the real issue was the preservation of racial preferences.

Proposition 54 was strongly rejected by whites as a group and minorities who were expected to oppose it. It's only majority support came from both men and women who identified themselves as conservatives and/or Republicans, according to Fox News exit poll data.

Low voter awareness was blamed for the failure of the two initiatives, which were expected to be included on the presidential primary ballot next March. Instead, they were moved to Tuesday's ballot to accommodate state laws that say qualifying initiatives must be presented on the earliest ballot offered.

California's past dabblings in direct democracy have seen voters revolt against taxes, bilingual education and affirmative action. Often, precedents set in California find their way to other states.

Fox News' Peter Brownfeld and The Associated Press contributed to this report.