California lawmakers struck a deal on a budget for the deficit-ridden US state on time, using new powers to avoid stalemates and delays of previous years.
Governor Jerry Brown still has to sign the budget, pushed through using a simple majority vote by deputies from his Democratic Party hours ahead of a midnight deadline.
"This was very, very tough. But we've been given the responsibility and we.. have done I think a very good job with the tools at our disposal," said Senate President Pro Tem Darrell Steinberg, cited by the Sacramento Bee newspaper.
Brown, who took office in January as governor of a state which would be the eighth biggest economy in the world if California were a country, is to hold a press conference Thursday to give his view of the budget.
His predecessor, Republican Arnold Schwarzenegger, introduced several tax measures with which he hoped to cut into the state's colossal deficit, at one point valued at $25 billion but now estimated at some 10 billion dollars.
The budget agreed Wednesday is a mixture of tax measures and spending cuts. Under previous budget rules tax increases had to be agreed by a two-thirds "super-majority," leading to repeated stalemates.
In 2009 a budget crisis pushed California to the brink of bankruptcy, sending its credit-rating plunging and forcing it to pay bills with IOUs.
Brown, who was also California's governor from 1975-1983, said when he took office in January that budget cuts would be "painful" but necessary to revive the western US state.