Californians face cuts in public spending and higher taxes, to fill a budget shortfall sparked by the state's electricity crisis. The plan is likely to be challenged in the state legislature.

Governor Gray Davis is asking for a temporary increase in vehicle license fees and a hike in the cigarette tax, with deep reductions in health programs and aid to local governments. The spending cuts would total $7.6 billion.

California's Energy Crisis Sparks Budget Shortfall - 2002-05-15

The budget shortfall of more than $23 billion began with a debt incurred as the state intervened in a failing electricity market. Added security costs after the terrorist attacks of last September, coupled with a drop in tourist dollars, have deepened the state's fiscal problems.

California's Energy Crisis Sparks Budget Shortfall - 2002-05-15

This year's spending plan is a departure from the surpluses, tax cuts and generous spending that marked the first two years of the governor's term in office. Mr. Davis is a Democrat and in this election year, the budget plan is likely to be challenged by his Republican opponents.

California's Energy Crisis Sparks Budget Shortfall - 2002-05-15

The Republican candidate for governor, Bill Simon, has accused Mr. Davis of mishandling last year's energy crisis, while Mr. Davis says he did the best he could with a problem he inherited.

State lawmakers will review the governor's plan and send him a revised proposal, in theory, by mid-June. In practice, lawmakers often miss the deadline.

The governor's budget includes borrowing of more than $4 billion based on future revenues. Mr. Davis says the plan reflects his belief that the California economy, now emerging from a recession, will recover within the next year.