Schwarzenegger sworn in

In front of 7,500 guests and an entourage of Hollywood stars, Arnold Schwarzenegger was sworn in today as California's 38th governor, pledging to give back to the state that gave him opportunity as an immigrant from Europe.

"Today is a new day in California," he said in his speech. "It is no secret that I am a newcomer to politics. I realize I was elected on faith and hope, and I feel a great responsibility not to let the people down."

Arnold Schwarzenegger and wife Maria Shriver on Election Day (Photo: San Francisco Chronicle)

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Referring to Ronald Reagan's image of America as a "shining city on a hill," the new Republican governor said he views California, with an "immigrant's optimism, as the "golden dream by the sea."

"Perhaps some think this is fanciful or poetic, but to an immigrant like me, who, as a boy, saw Soviet tanks rolling through the streets of Austria, to someone like me who came here with absolutely nothing and gained absolutely everything, it is not fanciful to see this state as a golden dream," he said.

"For millions of people around the world, California has always glimmered with hope and glowed with opportunity," he continued. "Millions of people around the world send their dreams to California with the hope their lives will follow."

The oath was administered on the steps of the Capitol in Sacramento by California Supreme Court Justice Ronald George as the state's new first lady, Maria Shriver, held the Bible.

"I am humbled, I am moved and I am honored beyond words to be your governor," Schwarzenegger told the audience after taking his oath. "I have taken the oath to serve you. … I will not forget my oath and I will not forget you."

Californians ousted Democratic Gov. Gray Davis Oct. 8, just 11 months into his second term and gave Schwarzenegger a landslide victory, ending the unprecedented recall election that had dominated national headlines for two months.

"I have come here to serve you," Schwarzenegger said today. "This election was not about replacing one man, it was not about replacing one part, it was about replacing the entire political climate of this state."

Among the actors in attendance were Rob Lowe, Rob Reiner, Danny DeVito and Jamie Lee Curtis. Singer and actress Vanessa Williams sang the national anthem.

Schwarzenegger elicited a rousing ovation when he declared his first act as governor, this afternoon, will be to repeal the state's 300 percent hike in the car tax.

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He also is calling a special legislative session to tackle the state's budget crisis and reform the workers compensation system.

Celebrations of the governor's inauguration will be relatively low-key as Schwarzenegger has decided to forgo the traditional balls and glitzy parties. He wanted to avoid a Hollywood-style celebration, aides said, because of the state's financial problems and the nature of the recall election.

Davis' first inaugural ball cost a record $3.7 million.

The governor's new financial deputy said, according to his staff's projections, the budget deficit could be about $25 billion. The state constitution requires the governor to present a budget by Jan. 1.

Along with repealing the car tax and addressing the fiscal crisis, Schwarzenegger promised during his campaign he would repeal a new law allowing illegal immigrants to get driver's licenses.

"I enter this office beholden to no one except you, my fellow citizens," Schwarzenegger stated. "I pledge my governorship to your interests, not to special interests. I want the people to know that my administration is not about politics, it is about saving California.

Davis was among the guests in attendance, along with former Los Angeles Mayor Richard Riordan, former U.S. Secretary of State George Shultz and Eunice Shriver, Schwarzenegger's mother-in-law and sister of the late President John F. Kennedy.

Schwarzenegger thanked Davis for a "smooth transition" and said he hoped differences could be put aside for the good of California.