State goes after high-hanging budget fruit

Gov. Schwarzenegger suggested this week that another round of deep spending cuts is likely because the state budget deficit is substantially larger than he and lawmakers expected.

Of course, the governor and the Legislature had patched together their last budget fix with overly optimistic revenue projections. No one outside the Capitol thought the budget was realistic.

So it's no surprise that Schwarzenegger told The Fresno Bee's editorial board earlier in the week that the budget will be another $5 billion to $7 billion short this fiscal year. That's in addition to the $7.4 billion gap that was earlier estimated for the 2010-11 fiscal year. And even higher numbers are being projected by some.

This comes after most state programs have taken huge cuts, and the governor says there will be more reductions.

So far the governor has ruled out tax increases to help bridge the gap, and we generally agree with him because of the depressed economy, although we think targeted fee increases could be appropriate, depending on the conditions.

"We are not out of the woods yet," Schwarzenegger said in Fresno. "The key thing is, we have to go and still make cuts and still rein in the spending. ... It will be tougher because I think the low-hanging fruits and the medium-hanging fruits are all gone. I think that now we are going to the high-hanging fruits, and very tough decisions still have to be made."

The "low-hanging fruits" he talked about were partly accounting gimmicks, such as pushing a state worker payday to the next fiscal year and increasing withholding payments from taxpayers.

Those moves didn't decrease spending or add revenue. But there were major cuts to programs and state workers lost pay on furlough days.

Now that lawmakers have come up with a water reform plan, maybe that accomplishment will give them enough confidence to tackle the budget in a much more serious way.

No more gimmicks and phony fixes. The governor and the Legislature must balance the budget, or the state will continue to have financial problems even after the economy has recovered.