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SACRAMENTO (CBS 5 / AP) ― California Gov. Arnold Schwarzenegger on Tuesday set in motion a historic showdown with the state Legislature by pledging to veto its budget, calling the plan irresponsible for burdening taxpayers and failing to meet his demands for long-term fiscal reform.

If Schwarzenegger follows through on his threat, it would mark the first time in modern history that a California governor would veto a state spending plan.

"This is one area I have to say that we have failed the people of California," Schwarzenegger said during a Capitol news conference, hours after lawmakers approved the spending plan. "I think nothing is more important than getting our fiscal house in order, and I promise the people of California that I will not stop until the job is done."

State lawmakers refused to back down, saying they were prepared to override Schwarzenegger's pending veto. The bill was expected to be delivered to the governor's desk Wednesday morning, with the Assembly and Senate likely to convene Thursday.

Senate Minority Leader Dave Cogdill said lawmakers had no stomach for prolonging the record-breaking impasse.

"It is a mistake, and I will vote to override the governor's veto, as should every other legislator who approved this budget," Cogdill, R-Modesto, said in a statement.

Schwarzenegger's announcement, with a veto expected as soon as Wednesday, came after a record-long stalemate that forced the state to delay billions of dollars in payments to schools, medical clinics, daycare centers and state vendors. Lawmakers finally cobbled together a patchwork spending plan on the 78th day after the start of the fiscal year, passing a $143 billion budget shortly after 2 a.m. Tuesday.

He said the reforms lawmakers added to the budget were flawed and would do nothing to halt the state's persistent imbalance between spending and the amount of money it takes in.

"I say enough is enough," Schwarzenegger said. "Californians have been put through this roller coaster too many times, and so this is why when they send me the budget, I will veto it."

The budget deal generated just enough Republican support to reach the two-thirds threshold needed for approval. Its main feature requires Californians to pay their income taxes sooner, a maneuver designed to help close a $15.2 billion deficit without borrowing or imposing new taxes.

Even lawmakers who voted for the plan agreed that it merely delayed the toughest fiscal decisions until next year. Schwarzenegger said the current budget would require a major tax increase or massive cuts to education.

"If (lawmakers) think that's what the people of California deserve, then I don't know what their thinking is of the people of California," he said. "I think the people of California deserve better."

He also reiterated a threat he made during the impasse to veto any bills sent to him until a budget deal had been struck. If lawmakers override his budget veto, he said he will take a hard line on their legislation, potentially wiping away a year's worth of work.

"Hundreds of bills will be vetoed," the governor said.

Assemblyman Sandre Swanson, D-Oakland, a member of the Assembly Budget Committee, said lawmakers are taking his threat seriously. Democrats in the Assembly scheduled a conference call Tuesday afternoon to determine what steps to take next, including whether to immediately return to the Capitol to override the governor's veto.

Assembly Minority Leader Mike Villines said lawmakers achieved a budget compromise that funded education, public safety and contained no borrowing from transportation or local government.

"In short, lawmakers did what the governor asked," Villines, R-Clovis, said in a statement.

During the budget debate Monday night, Schwarzenegger sent a letter to the Legislature's Democratic and Republican leaders demanding a stronger rainy day account to help the state weather future fiscal crises and curbs on when and how that money could be spent. Lawmakers did not meet all of his requests.

Top state officials say they are not aware of any instance in which a California governor has vetoed the entire state budget, going back to at least 1950. Michael Bartolic, a researcher with the State Library, said if Schwarzenegger makes good on his veto, it would appear to be the first veto of a budget in state history.

The last time the Legislature overrode a gubernatorial veto was in July 1979, when both the Senate and Assembly rejected former Gov. Jerry Brown's veto of a bill giving state employees a pay raise. Brown also suffered an override after he vetoed a bill reinstating the death penalty.

Assembly Speaker Karen Bass, D-Los Angeles, predicted lawmakers will quickly override Schwarzenegger's veto.

She blamed the budget meltdown on Schwarzenegger because he was unable to persuade Republican legislators to support his proposal for a temporary sales tax increase. She also said he supported the budget lawmakers sent him Tuesday except for its omission of the curbs he wanted to limit when lawmakers could tap the rainy day fund.

Lawmakers had agreed to Schwarzenegger's demand to raise the rainy day fund from 10 percent of the general fund budget to 12.5 percent.

"One single provision," Bass said in a statement. "That's no excuse to close down services for the developmentally disabled and make small business owners mortgage their homes to stay in business."

The budget negotiations stalled amid three competing interests: Schwarzenegger insisted on long-term reforms such as the large rainy day fund and midyear authority to cut spending; Democrats wanted to raise taxes on corporations and the wealthy; and Republicans refused any tax increases and instead wanted to borrow money and cut programs further.

The compromise plan satisfied no one, relying primarily on accelerated state income tax payments from working Californians and those who pay estimated taxes each quarter, such as corporations and wealthy individuals. It also closed several tax loopholes.

The budget makes $7.1 billion in spending cuts and calls for selling bonds based on future revenue of the state lottery. The lottery plan would raise $10 billion over the next two fiscal years, but requires voter approval.

The inability of elected leaders to solve California's ongoing budget problems, in which spending continually races ahead of tax revenue, has inspired a potential movement to revamp state government.

The Bay Area Council, representing the chief executives of Google, Yahoo, Chevron, Wells Fargo and other major San Francisco Bay area businesses, is actively pushing for a state constitutional convention. One goal is to implement a two-year budget cycle and remove the state's two-thirds vote requirement to pass spending bills in the Legislature.

California, Arkansas and Rhode Island are the only states with such a high threshold for passing budgets.

The group is laying the groundwork to authorize a convention through the Legislature or by ballot initiative.

"It appears we have successfully tapped a rich vein of frustration driven by the budget crisis, several high-profile legislative failures over the past two years, a negative economy and a realization that maybe the recall wasn't enough," Jim Wunderman, president of the Bay Area Council, said in a statement.

He was alluding to the 2003 recall of former Gov. Gray Davis, which elevated Arnold Schwarzenegger to the governor's office.

In the past year, attempts to reform California's health care market and upgrade the state's water storage and delivery system have failed amid partisan bickering.

(© 2010 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)