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Last Updated: Thursday, 9 October, 2003, 06:23 GMT 07:23 UK
Arnie warns of challenges ahead
Arnold Schwarzenegger and his wife during victory speech
Arnie will be governing one of the world's largest economies
Film star Arnold Schwarzenegger has admitted huge challenges lie ahead after his election as governor of California.

He said it was unclear just how big the budget deficit of America's richest state was, with some sources putting it at $38 billion over two years.

The Republicans' newest governor reached out to the Democrats who otherwise dominate the state in a call to "rebuild" California together.

The Terminator star also warned fans he would have "no time for movies".

At his first news conference since winning by a wide margin, Mr Schwarzenegger said he wanted to have an independent audit of the state's finances to find out where money was possibly being wasted.

There is a lot of work ahead - on my mind is not the movies at all
Arnold Schwarzenegger

He said he was "unwilling" to raise taxes and promised to scrap a controversial new car tax.

But he also warned that Native American casino operators - who reap annual revenues of $5bn - would have to pay their "fair share".

Mr Schwarzenegger - who ousted the Democratic incumbent Gray Davis - announced that his transition team would be led by Republican Congressman David Dreier.

The new governor, who will take office next month, pledged to restore trust in California's government and instil fiscal discipline.

It is the first time in the state's history that Californians have voted to sack their governor mid-term.

President George W Bush congratulated Mr Schwarzenegger by phone, saying he looked forward to working with him.

With all the votes counted, Mr Schwarzenegger secured 48.7% - a much greater share of the vote than the polls predicted.

Republican activists had triggered the recall vote - the first in 82 years - following frustration at the budget deficit, high levels of unemployment and struggling schools.

The BBC's Justin Webb says the people who voted for Mr Schwarzenegger will soon want to see concrete policies and results from the new governor who has been short on detail and "big" on promises.

Trend-setter?

The BBC's David Willis in Los Angeles says the big political problem for Mr Schwarzenegger is that he is not fully in control of the money-raising process.

Large parts of the state budget are already earmarked for projects endorsed by referendums and cannot be tampered with.

His election has sent a shock wave across America in an age of discontent with conventional politics and could set a trend, our correspondent says.

Only one other governor has been recalled in United States history - North Dakota's Lynn Frazier, in 1921.

In a two-part ballot, voters were asked if they wanted to recall, or sack, Governor Davis.

Regardless of their decision on the recall, they also had to indicate who they preferred among the 135 alternative candidates running.

With 100% of electoral precincts reporting results, 55.4% wanted a recall, against 44.6% opposing it.

Mr Schwarzenegger won with 48.7% support. His closest rival, Lieutenant Governor Cruz Bustamante, a Democrat, garnered 31.7%.

There had been unprecedented interest in the vote and election officials reported long queues and a shortage of parking places.

Earlier, Mr Davis told his supporters that the voters had decided "it was time for someone else to serve and I have accepted their judgement".

Mr Schwarzenegger was accused during the campaign of sexually harassing women and once praising Hitler.

In response, the Austrian-born actor apologised for "rowdy behaviour" on film sets but denied ever expressing sympathy for the Nazis.




WATCH AND LISTEN
The BBC's Richard Forrest
"The people of California voted in their millions for Arnold"



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