Schwarzenegger says it doesn't do enough to revive the state's spiraling economy and close a projected $42 billion budget shortfall over the next 18 months.

The plan Democratic lawmakers approved Thursday made more than $7 billion in cuts and added about $11 billion in tax increases and fees.

Schwarzenegger says Democrats watered down the spending cuts and increased the taxes from the package he was negotiating with them.

He says he wants an economic stimulus package that includes private-sector partnerships and help to keep struggling Californians in their homes.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

SACRAMENTO, Calif. (AP)—California lawmakers have approved an $18 billion Democratic plan to address the state deficit.

They passed several pieces of legislation with a simple majority Thursday, avoiding the two-thirds requirement typically needed to approve tax increases.

Republicans voted for some of the bills that made sweeping cuts to California programs. In all, the legislation trims more than $7 billion from schools, health programs and prisons.

Democrats and Republicans have been at odds since the beginning of November over how to solve the state's ballooning deficit. It is expected to hit $42 billion in the next 18 months.

The package now goes to Gov. Arnold Schwarzenegger, who has not said whether he supports the Democrats' plan.
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