SACRAMENTO -- — Gov. Arnold Schwarzenegger could soon come to regard the epic budget mess he inherited four years ago as a minor nuisance compared to the challenge he faces now.
As he prepares the budget blueprint that he will release in January, the governor is in a bind. There isn't as much red ink this time, or an emergency cash shortage -- at least not yet. But deals he made to keep the state afloat earlier in his tenure now hamper his ability to take on a rapidly swelling deficit that early projections show will hit at least $10 billion.
Those deals, made when the deficit was substantially larger, put a lock on billions of dollars. Large pots of money that lawmakers have tapped to patch past budget deficits are no longer available to them. The prohibitions are even etched into California's Constitution, thanks to ballot measures championed by Schwarzenegger.
"There is no question this budget will be tougher" than when the deficit was $14 billion, said Mike Genest, the governor's budget chief. "A lot of options we had before have been removed."
The governor has promised that the state would never again raid local government funds, never again borrow money earmarked for transportation and never again balance the budget through borrowing.
Public university students were guaranteed no more surprise fee hikes through at least 2010. Courts were also guaranteed no more cuts. An after-school program the governor pushed costing more than half a billion dollars annually can't be suspended.
Billions of dollars in potential cuts or funding shifts have been precluded in the last few years. Although the governor has long complained that his ability to tame budget deficits was held in check by "autopilot spending" -- programs that under state law get a set share of the budget -- there is more of it now than ever. And Schwarzenegger is one reason for that.
"We have just tightened the noose around our neck instead of figuring out how to get out of the noose in the first place," said Hannah-Beth Jackson, a former Democratic assemblywoman from Santa Barbara who plans to run for the Senate next year. "We have all these spending requirements, and they end up working against each other. We can't take from this, we can't take from that; we've become immobilized."
Lawmakers have been complaining for decades that voter-imposed budget constraints are a straitjacket, taking away needed flexibility to address fiscal problems as they arise or bring a rational approach to setting spending priorities during good times.
