Gov. Arnold Schwarzenegger on Tuesday signed the state's $143 billion spending plan after the longest budget deadlock in state history, freeing up billions of dollars in payments to medical clinics, nursing homes, daycare centers and contract vendors.

The governor's signature comes nearly a quarter of the way through the fiscal year after an impasse that stemmed from a partisan legislative standoff over how to close California's $15.2 billion deficit.

But Schwarzenegger's approval doesn't finish the budget battle. Voters will be asked to tie up the agreement's loose ends during a special election next year.

The governor signed the budget bills in his office, rather than the Capitol rotunda where budgets are usually signed, and used the record-long stalemate to promote an unrelated redistricting initiative on the November ballot.

He also issued line-item vetoes to trim $510 million from the general fund.

"Why I didn't feel like celebrating in the rotunda is that it is in excusable to have a budget that's three months late," he said. "It's three months late because both of the parties stayed in their ideological corners and refused to come out."

In the final spending plan, lawmakers met the governor's demands for a stronger rainy day fund and authority to make spending cuts during the year, but they did not address the state's imbalance between revenue and spending.

California voters will have to approve the changes to the rainy day fund, as well as a plan to borrow $10 billion from future lottery revenue to help stabilize the next two state budgets. Schwarzenegger said a special election is likely to be scheduled for June.

The stalemate dragged on this year over differences in how to close the state's multibillion dollar deficit.

Republicans opposed any tax increase, while Democrats sought to combine budget cuts with higher taxes on corporations and the wealthiest Californians.

Schwarzenegger offered what he considered a compromise proposal involving a temporary 1 cent increase in the state sales tax that would drop after three years. That plan failed to gain support from Republicans, which meant it would not be able to generate the required two-thirds vote in the Assembly or Senate.

The final version approved by the Legislature last week includes $7.1 billion in spending cuts, which advocates say will trigger deep cuts to health care programs. Critics also said the plan relies on accounting tricks to inflate revenue and makes permanent some tax breaks that will lead to larger deficits.

Assembly Speaker Karen Bass, D-Los Angeles, reiterated her call to have a commission review the state's tax structure, while Republican leaders pledged to fend off tax increases in the next fiscal year that will start July 1.

Those negotiations are expected to be just as frustrating as this year's, as the state's economy continues its tailspin. Lower tax revenue and automatic spending increases are expected to produce a deficit of at least $1 billion in the 2009-10 fiscal year.

That shortfall will grow significantly if voters reject the lottery proposal, which is expected to add $5 billion annually for the next two years.

After signing the budget, Schwarzenegger was scheduled to participate in a rally for Proposition 11, the Nov. 4 ballot initiative that would take authority to draw legislative districts away from state lawmakers.

Schwarzenegger said the current system creates a conflict-of-interest that prevents truly competitive races for Assembly and Senate seats. When districts are weighted strongly for Democrats or Republicans, only the most partisan candidates win and head to Sacramento. That dynamic makes compromise extremely difficult, Schwarzenegger has said, pointing to this year's protracted budget deadlock as an example.

Proposition 11 would give the power to draw legislative districts to an independent citizen's commission. It has support from a variety of groups, including AARP, the League of Women Voters, California Common Cause and the California Chamber of Commerce.

An earlier Schwarzenegger redistricting effort, which would have given the responsibility to a three-judge panel, was rejected during the 2005 special election.