California lawmakers approved a plan to close the state’s $42 billion deficit early Thursday morning.

Following a five-day impasse, state senators approved the budget – a combination of taxes, cuts and borrowing – after Democrats agreed to give Republican Sen. Abel Maldonado, who represents the Monterey Peninsula, some key changes in exchange for providing the needed 27th vote.

Senators agreed to: A constitutional amendment establishing an open primary system; a constitutional amendment banning pay increase for legislator during deficit years; and elimination of the extra 12-cent tax on gasoline.

After the Senate approved the budget bills, the package headed to the Assembly where lawmakers in the lower house also approved the spending plan.

Gov. Arnold Schwarzenegger praised the Legislature’s actions.

“I am extremely proud of the members of the legislature, both Republicans and Democrats, who had the courage to stand up and put the needs of Californians first. Rather than approaching this unprecedented crisis with gimmicks and temporary solutions, we took the difficult but responsible steps to address our entire $42 billion budget deficit and pass historic bipartisan reform measures,” he said. “I am pleased that the legislature used my budget proposal as a blueprint for this budget and included each element of the four-legged stool: spending reductions, revenue increases, economic stimulus and government efficiency.

“This is a very difficult budget, but we have turned this crisis into an opportunity to make real, lasting reforms for California. Some special interests may not like this budget – but like I always say, what’s good for the people is not always good for special interests. I look forward to partnering with the people to make sure these bipartisan reform measures are passed to put an end to our budget roller coaster and get California moving forward again.”