Deal reached on state budget

Gov. Arnold Schwarzenegger and legislative leaders averted a historic budget veto Thursday, agreeing to a compromise spending plan that includes the governor's demands for budget reform and scraps some of the borrowing gimmicks he opposed. AP in the Daily News.

Facing a veto threat from Schwarzenegger of the spending plan they'd approved just days earlier and uncertain whether they could muster the two-thirds vote of the state Legislature required to override it, the four legislative leaders met with the governor again and agreed to many of his demands.

They emerged from a midafternoon meeting saying they would change the $143 billion spending plan the Legislature approved two days earlier.