Budgeting the Future ; Schwarzenegger's Ultimate Test Will Be Bridging a $15 Billion Gap - without New Taxes

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Friday, the prologue to Arnold Schwarzenegger's political drama ends. Act One is fixing the state budget, and with the introduction of his budget proposal Friday afternoon, Governor Schwarzenegger must at last lay aside vague speeches and campaign promises for specifics.

In a state that has a habit of turning actors into politicians, the newest understudy has already arrived at his Oscar moment - a scene that could go a long way toward deciding his future. The task is enormous. He has six months to convince one of the most liberal legislatures in the United States that the primary way to balance a budget deficit estimated at $15 billion is to make massive cuts - without raising taxes by a single cent.

Says one political scientist, "It's going to get ugly."

Then again, the political process was always more Pollock than Pissarro, a splatter of egos and ideas gradually crafted into something sensical. What is needed, say observers, is a strong guiding hand, and even amid the harrumphs of indignant legislators, the outlines of Schwarzenegger's budget at least offer hope that, finally, California might put its financial house in order.

"Based on what I've heard so far, it seems that [the administration] is looking seriously at how to fix the budget," says Joe Canciamilla, a moderate Democrat in the state Assembly. "At this point, I'm optimistic that the budget is something we'll be able to sink our teeth into."

He stops far short of suggesting that he'd back the Schwarzenegger plan. For one thing, the administration has kept an unusually tight lid on Friday's proposal, so Canciamilla wants to see the specifics first. Speeches and reports, however, point to a budget with no new taxes. The administration will seek to save money by reorganizing and streamlining government, trimming payments to education, and renegotiating contracts with native American casinos.

What strikes Canciamilla most is that Schwarzenegger also seems to be preparing the Legislature for severe cuts, particularly to public-health and welfare programs. Canciamilla doesn't necessarily agree with that tactic, but says it suggests that Schwarzenegger is taking an honest look at the situation. "He is facing reality," says Rod Kiewiet, a political scientist at the California Institute of Technology in Pasadena.

Not all agree. Some legislators have looked at the threads of the proposal and seen only Republican retread. …