SACRAMENTO — After being swept into office on promises that he could cut taxes by billions of dollars without disrupting essential government services, Arnold Schwarzenegger now faces the extraordinarily difficult task of finding a way to do it.
Many budget makers are skeptical that the audit Schwarzenegger launched Thursday by handing the task to government finance expert Donna Arduin will find billions of dollars in waste as the governor-elect has suggested, or turn up the kinds of surprises he predicts will provide a guiding light toward fiscal health.
As Schwarzenegger inherits what he acknowledges could be as much as a $20-billion deficit, the only concrete budget action on his agenda is one that threatens to add to that deficit: rolling back a $4.2-billion increase in the state car tax.
Bond rating agencies already are warning of the problems a car tax cut could cause.
And fiscal experts in Sacramento are skeptical the new governor is going to achieve the kind of savings he has promised through other pillars of his "100-day plan," such as renegotiating state agreements with Indian casinos and unions that represent government workers.
"The math is very tough," said state Treasurer Phil Angelides, a likely Democratic contender for governor in 2006. "If he has a way to do it, if he can do it without taxes, he ought to lay it out," Angelides said.
On Thursday, Schwarzenegger again resisted laying out anything more specific.
"There are a lot of things we don't know," he said at a news conference. "What we want to do is really get in and find out."
Schwarzenegger refused to be specific even about where in the budget he wants the auditing team to look for overspending. He instead spoke generally about the process of crafting budgets being broken.
"They have spent too much money. They've seen the writing on the wall four years ago, that we are having a decline of business and revenues and all that," he said.
"They kept spending, spending, spending.... We have to cut some spending."
Members of Schwarzenegger's economic advisory council were similarly nonspecific.
"He's going to solve the budget problem by cutting spending and not by raising taxes," said George P. Shultz, a former U.S. secretary of State and Treasury secretary who is now a fellow at Stanford's conservative Hoover Institution.
"The whole tone in Sacramento is going to turn 180 degrees, from being anti-business to being pro-business."
