He also wants to raise taxes but does he have the clout to get his way?
California college students are tired of budget cuts to education that inevitably force their tuition to jump higher.
"My education was cut short because I could not pay for tuition any longer. I could not stand the student fees going up and up," said protester Andrew Peake.
But with a souring economy, high unemployment and a foreclosure crisis, the Governor already announced a combination of new taxes and deeper cuts are the only way to keep government services running.
"We have a dramatic situation here, and it takes dramatic solutions and immediate action. We must stop the bleeding," said Gov. Arnold Schwarzenegger (R) California on Thursday.
Critics say Governor Schwarzenegger hasn't really changed California's budget problems since riding into office five years ago on a platform of ending Sacramento's spending addiction.
"If he would have have held spending back when he got in, like he said he would, he wouldn't have a problem right now," said Ted Costa from People's Advocate, Inc.
Political watchers, though, are quick to point out Sacramento's ways are not that easy to fix, and that the outsider under-estimated the task at hand.
"In 2003, he thought: 'Well, I'll go up there, make a few speeches, and it'll all get fixed. He knows better now. This is a hard thing to change," said political analyst John Syer Ph.D.
Syer also says no leader could have anticipated the global financial crisis. Government spending plans are often crafted on the amount of taxes expected to come in.
"You can never foretell the vigorous economy, and how much revenue it produces," said Syer.
Still, Schwarzenegger's supporters had high hopes once he arrived in Sacramento, budget deficits would leave.
"We still have the same problem: overspending. We still have the same problem: we're afraid of the special interests," said Costa.
Governor Schwarzenegger is essentially a man without a party. He has a strange relationship with fellow Republicans while Democrats don't always embrace his GOP ideas. That means change is painstakingly slow.