Gov. Arnold Schwarzenegger this afternoon signed the newly approved $87.5 billion state budget, but vetoed $962 million in spending.
The action officially ends the 100-day standoff with lawmakers.
The vetoes included $366 million from CalWorks, the state's welfare-to-work program, and $256 million from subsidized child care. The governor had proposed eliminating both programs.
Schwarzenegger said he hoped the federal government would forward enough money to cover the vetoed welfare money to avoid "adverse program impacts."
The vetoes allowed the governor to increase the budget reserve fund from $375 million to $1.3 billion.