California voters voted down all but one ballot measure backed by Gov. Schwarzenegger and state Democratic lawmakers that were designed to shore up the precarious state finances. 

Per the Times, Schwarzenegger said in a statement, “Tonight we have heard from the voters and I respect the will of the people who are frustrated with the dysfunction in our budget system. Now we must move forward from this point to begin to address our fiscal crisis with constructive solutions. We face a staggering $21.3-billion deficit and in order to prevent a fiscal disaster, Democrats and Republicans must collaborate and work together to address this shortfall.”

The sole measure that appeared to pass would prohibit state lawmakers from taking pay hikes when the state is running a deficit.

It’ll be interesting how this will be spun in the coming days. In 2005, the rejection of ballot measures backed by Schwarzenegger was viewed as a stinging rebuke to his political power. But bizarrely enough, the state’s financial state is so devastating that it is hard to see this as causing the same amount of damage. In other words, his popularity already has been sagging. According to the Times, “a recent poll by the Public Policy Institute of California put his approval rating at 34%, just above half of what it was in 2004.” It was telling that Schwarzenegger was at the White House today, as President Obama unveiled a set of fuel efficiency standards that mirror those he championed for the state.
Update: The Times’ Michael Finnegan has a great piece on the underlying problems of California’s fiscal mess: A schizoprehenic public, the enduring consequences of Prop 13 and a patchwork of ballot initiatives that have tied the hands of the governor and state lawmakers.