SACRAMENTO, Calif. -- Gov. Arnold Schwarzenegger's administration released a proposal Wednesday to address California's anticipated $41.6 billion budget shortfall over the next 18 months. The plan relies on $14.3 billion in tax increases and other new revenue, $17.4 billion in spending cuts and $10 billion in borrowing, some of which requires voter approval.

The $14.8 billion budget deficit for the fiscal year that ends in July is about 14 percent of the state's $103.4 billion general fund. The deficit is forecast to grow to about $27 billion for 2009-10 if no action is taken.

Here are the highlights of the administration's plan:

TAX INCREASES:
Total: $14.3 billion

Raises the state sales tax by 1.5 percent until 2012 and expands it to include taxes on services such as car repairs, sporting events and golf.

Adds a "nickel-a-drink" to all alcoholic beverages starting in February to pay for substance abuse and treatment programs.

Levies a 9.9 percent tax on each barrel of oil extracted from the state beginning in February.

Increases vehicle registration fees by $12 and driver's license fees by $3.

Reduces the personal income tax credit for those with dependents to $103 per dependent from the current $309.

SPENDING CUTS:
Total: $17.4 billion

Cuts spending for public schools by $2.1 billion in the current fiscal year.

Reduces the school year by a week starting in 2009-10, for a savings of around $1.1 billion.

Eliminates the voter-approved First 5 Commission for children's health care, paid for with a 50 cent-per-pack tax on cigarettes that voters approved in 1998. The $275 million instead would pay for "high priority" children's programs run by the Department of Social Services. This change would require voter approval.

Eliminates $153 million in the current fiscal year and $306 million in 2009-10 for local transit grants.

Reduces benefits in the state's health insurance program for the poor, Medi-Cal, by $51 million in 2008-09 and $669 million in 2009-10. The cuts include eliminating dental, optometry and psychological benefits for adults, increasing the income levels required for families to become eligible, reducing reimbursement rates for public hospitals and qualifying undocumented immigrants only on a month-to-month basis.

Cuts funding by 3 percent for regional centers that provide services to people with developmental disabilities.

Shifts $227 million from Proposition 63, a 1 percent voter-approved tax on millionaires that supplemented mental health funding. The money instead would pay for regular funding of mental health services. This would require voter approval.

Cuts $200 million this fiscal year and $1.25 billion in the next fiscal year in income support payments to low-income elderly, blind and disabled Californians.

Cuts monthly payments in the state's welfare-to-work program, CalWORKS, by 10 percent, imposes a 60-month time limit for some assistance and imposes a six-month review for families that are not participating in work requirements, for a savings of $820 million through fiscal 2009-10.

BORROWING:
Total: About $10 billion

Relies on borrowing $5 billion against future lottery revenue the state could realize by dramatically increasing ticket sales with higher prize payouts and modernizing the games. The Legislature already passed the plan, but it still needs voter approval, and an election has not been scheduled.

Relies on the future sale of up to $5 billion in so-called revenue anticipation notes, or bonds, in the financial market that could be paid back in future years. To do this, the state Legislature would have to approve a balanced budget by the start of the fiscal year July 1, and the credit market would have to substantially recover, said Schwarzenegger's finance director, Michael Genest.