In his final state of the state speech today, Gov. Schwarzenegger urged lawmakers to reform the state pension system, creating a two-tier system that would change only for new hires. Pensions for current employees could not "legally and morally" be changed, he said. He also proposed a constitutional guarantee California would never spend more money on prisons than schools and said he supported a simple majority, rather than two-thirds, vote to pass a budget. Read a Sacramento Bee story here. The governor is expected to present his budget on Jan. 8.