With California's fiscal health and Gov. Arnold Schwarzenegger's (search) political standing hanging in the balance, voters decided Tuesday whether to approve $15 billion in borrowing to bail out the state budget.
Schwarzenegger has used his celebrity and his political capital to try to build support for the bond measure, the centerpiece of his plan to solve the state's financial woes without what he warned would be "Armageddon" budget cuts or higher taxes.
The bond measure -- the nation's largest ever to appear on a statewide ballot -- would be used to refinance California's debt and help close next year's budget gap.
The success or failure of Proposition 57 (search) was seen as the biggest test yet of Schwarzenegger's influence with the voters who swept him into office in a recall election just five months ago.
"One of the reasons Schwarzenegger is wielding so much political influence is his perceived impact on the electorate -- his ability to communicate and take matters directly to the people," said GOP strategist Allan Hoffenblum. "Should he lose on Tuesday, it could weaken his ability to do that on other matters in the future."
A recent California Field Poll showed 50 percent of voters in favor of the bond measure, 36 percent opposed and 14 percent undecided.
A companion measure, Proposition 58 (search), would restrict borrowing in the future and create a state reserve fund. Both had to pass Tuesday for either to take effect.
Schwarzenegger voted Tuesday morning in a recreation center near his Brentwood home. "It is very important for people to support this because it will save the state and it will get us back on track to fiscal recovery," he said.
The governor has been barnstorming the state in support of the bond measure.
Last week, the movie star-turned-governor held a rally at Universal Studios with actor Rob Lowe and threw T-shirts to supporters. On Monday, he went to Jay Leno's "The Tonight Show" to tout the bond measure alongside the man he ousted -- former Democratic Gov. Gray Davis.
Backers have warned of a potential financial meltdown if the bond fails, though the state still has possibility of a backup $10.7 billion bond issue now in the courts on a legal challenge.
State lawmakers can also roll $14 billion in short-term state debt into the new fiscal year, as they have done the past two years.
Two other issues are on the ballot. Proposition 55 would sell $12.3 billion in bonds to pay for new and improved schools, and Proposition 56 would lower to 55 percent the support needed in the Legislature to pass a budget. Currently, budgets need at least two-thirds support.
The deficit bond and school bond issues would raise California's long-term debt to about $59 billion and earmark more than 6 percent of the state's annual budget for interest payments.