With the same kind of tough but hopeful talk he used to propel himself into office, Gov. Arnold Schwarzenegger implored California's legislators Tuesday to help him balance the state's books without raising taxes, revive the business climate and overhaul how government operates.

In a 28-minute State of the State speech that drew more media attention than any in recent memory, Schwarzenegger laid out several proposals, including more local control of school financing and a "total review" of government agencies and programs that aides said "happens in California once in a generation."

"Every governor proposes moving boxes around to reorganize government," Schwarzenegger told a joint session of the Senate and Assembly broadcast live statewide on radio and television.

"I don't want to move boxes around; I want to blow them up."

Calling the state's executive branch he now runs "a mastodon frozen in time and about as responsive," the former movie star and champion bodybuilder said he wants duplicative agencies consolidated, needless boards and commissions abolished, and antiquated purchasing systems modernized.

"Some of the recommended actions I will make by executive order," the Republican governor promised. "Some will require legislation. And some will need constitutional change."

And then, in one of the several instances in his speech where a mischievous-looking grin spread briefly across his chiseled face, Schwarzenegger said: "I want your ideas, and the more radical the better."

He also proposed a "predictable" college fee system that could limit annual increases to 10 percent, a "green bank" of state funds to promote energy-efficient buildings, a plan to consolidate "categorical" programs to increase local control of school spending, and announced renewed efforts to renegotiate Indian gambling pacts.

Schwarzenegger also used the speech to kick off a 10-week campaign he plans to wage to win voter approval in March for his $15 billion debt-reduction bond and a companion measure that would create a budget reserve and prohibit borrowing to close future deficits.

The bond issue would borrow money in long-term financial markets but close the budget deficit only for this fiscal year. If it is defeated, he warned, "the alternative is economic chaos."

"But the second bullet -- the second financial crisis -- has already left the barrel and is headed right at us," he said.

That's the $15 billion deficit projected for the fiscal year beginning July 1. Schwarzenegger is scheduled to release that budget proposal Friday morning, and he repeated his promise that it won't include a tax increase.

"A tax increase will be the final nail in California's financial coffin," he said. "The people of California did not elect me to destroy jobs and businesses by raising taxes."

To thunderous applause from his fellow Republicans, he added: "I will not make matters worse."

That approach, however, is bound to prove difficult in the Democratic-controlled Legislature, where leaders such as Senate President Pro Tem John Burton, D-San Francisco, joined others in calling for tax increases.

"By saying that we have to take money from the poorest of the poor, but cannot raise taxes on people making ... $2 million a year makes absolutely no sense morally, no sense politically and really makes very little sense fiscally," Burton said in the Democrats' official televised response to the speech.

"We will work with this governor," Assembly Speaker Herb Wesson, D-Culver City, added. "We will cooperate with this governor. But we will not capitulate on Democratic core values that I believe are important to most Californians.

"Tonight we heard a speech. We didn't hear a budget. On Friday, we'll get the details. And on Friday, we'll be able to understand exactly what the governor's words meant."

For all the rhetoric coming out of the Capitol in recent weeks about bipartisan cooperation, reaction to the speech broke fairly predictably along party lines.

Republicans praised Schwarzenegger for bold leadership and vision, while Democrats suggested he's still more comfortable with dramatic gestures than with governing and proposing solutions to the state's most vexing problems.

"I thought it was outstanding," said Sen. Dennis Hollingsworth, R-Temecula. "He laid out the case for getting our fiscal house in order by reining in spending. Not only the need for but the benefits of fixing workers' compensation and restoring more local control to schools and teachers and parents, and doing all that without a tax increase. I think that all adds up to an outstanding delivery and an outstanding speech."

But Democratic state Sen. Sheila Kuehl, who after the recall election suggested Schwarzenegger had so little to offer about how the state should be run that some Democrats might boycott the speech, said he's still coming up short.

"He didn't mention the word health care or anything to do with the health care crisis, the insurance crisis, the emergency room crisis, hospitals closing ... " she said.

"And when he talked about the environment, he kind of just bounced over a couple of things, but not about air quality or water quality or asthma or anything of the things we'd associate with it."

And Democratic state Treasurer Phil Angelides, who has made no secret of his interest in running for governor in 2006, repeated his criticism of Schwarzenegger's March bond proposal.

"I agree with the governor that we have reason to be optimistic and that all of us need to refocus on how we rebuild the economy," Angelides said during an interview in the large white tent assembled on the Capitol lawn to accommodate all the news media.

"But I absolutely part company with him on the way he is going about this. I do not believe that you rebuild California's economy by increasing the deficit, by piling on more debt and by slashing essential investments."

Democratic state Controller Steve Westly, in contrast, has agreed to co-chair the bond campaign with Schwarzenegger.

Written largely by Landon Parvin, a speechwriter for former President Reagan, Schwarzenegger's first State of the State address was delivered with the aplomb and skill one would expect from a Hollywood film star who has appeared in 30 movies and became one of the entertainment industry's highest-paid commodities.

The 56-year-old governor, in fact, invoked two of his less-heralded movies as proof of the legendary salesmanship that he now plans to employ in traveling around the country and world luring "jobs, jobs, jobs" to California as its self-appointed "job czar."

"If I can sell tickets to my movies like 'Red Sonja' or 'Last Action Hero,' " he said to hearty laughs, "you know I can sell just about anything. And California is the easiest sell I've ever had."

It was one of the few lines that didn't appear in the advance text given out 30 minutes before the speech to many of the 250 reporters who requested media credentials. Republicans also got an advance look at the text, since the Assembly Republican caucus was already handing out typed reactions to the speech before Schwarzenegger was even introduced by Lt. Gov. Cruz Bustamante, his Democratic rival in the recall election.

Like most such speeches, Schwarzenegger's was filled with a recitation of accomplishments, such as his repeal of last year's tripling of the state's car tax and legislation that would have allowed illegal immigrants to obtain driver's licenses.

The speech was also filled with proposals for change that aides said merely reflected his commitment to fulfill promises made in the historic election to recall Gov. Gray Davis.

Schwarzenegger wants to renegotiate long-term energy contracts signed in the middle of the state's electricity crisis and do more to speed building of new power plants. And he wants to limit college fee increases to no more than 10 percent a year and fund the opening of a new University of California campus in Merced.

Schwarzenegger demanded that legislators bring him a comprehensive reform of the workers' compensation program by March 1 -- one day before the state's primary election -- or he'll put his own proposal on the ballot in November.

He said he'll unveil new programs to promote the use of solar energy and hydrogen-powered vehicles.

Knowing he's going to deliver some very bad news when he unveils his budget plan Friday, Schwarzenegger reminded those listening to his speech that he didn't run for governor just to reduce state spending.

"I remain a great believer in the future of this state," Schwarzenegger said. "I did not seek this job to cut, but to build. I did not seek this job to preside over the decline of a dream but to renew it."

Address highlights:
• Named state Controller Steve Westly, a Democrat, to co-chair the campaign committee for a $15 billion bond measure on the March 2 ballot.

• Said he would not agree to tax increases, and would make budget cuts - "but they will not be forever."

• Demanded lawmakers pass his workers' compensation proposal by March 1, or he would seek to place it on the November ballot.

• Promised a "total review of government" to consolidate some departments and boards, eliminate others.

• Proposed that college fee increases be limited "to no more than 10 percent a year."

• Called for repeal of law that restricts school districts' ability to contract for services.

• Proposed that $2 billion in "categorical" school funding be given to districts with no strings attached.

• Promised to encourage solar power in new homes, promote hydrogen vehicles and create a program to encourage retrofitting of energy-inefficient buildings.