Whoa, fix your headline there.

FTA: "Their agreement, which could go before the full Legislature within days, does not include any broad-based tax increases, relying instead on deep cuts in government services, borrowing and accounting maneuvers to wipe out the deficit."

I'll be interested to see how this pans out. Cutting services is really the only play. Increased taxes would just lead to decreased consumption, and with unemployment continuing to rise, expect to see income tax receipts to come up way short.

The LA Times sounds really pissed off about the cuts.

Look at how they chose to frame the story:

Tens of thousands of seniors and children would lose access to healthcare, local governments would sacrifice several billion dollars in state assistance this year and thousands of convicted criminals could serve less time in state prison. Welfare checks would go to fewer residents, state workers would be forced to continue to take unpaid days off and new drilling for oil would be permitted off the Santa Barbara coast.

"We've accomplished a lot in this budget," said Gov. Arnold Schwarzenegger

It's almost as if they're trying to tell us something. ;)

I'm skeptical of this. Here's the paragraph that concerns me.

"Democrats, who initially sought tax increases, said they had managed to ward off cuts proposed earlier by Republicans that would have been catastrophic to the state's social safety net."

Here's the problem. The only way they could both cut spending and "preserve the safety net" is to cut rates. Because the "safety net" is a series of programs and if they aren't cutting the programs they have to be cutting what they pay for the programs. Meaning they're planning to pay less to the agencies that service the children, elderly and mentally ill who survive because of the state's safety net.

But a look at any non-profit angency's books will tell you they barely get by as it is. So suddenly these agencies are on the verge of collapse which is something that simply can't happen. You can't have children, the elderly or the mentally unbalanced thrown out onto the street en masse.

So what happens? The state is forced to go over budget to keep these agencies alive. So they increase the rates, and we're back to the same problem. I'm as against tax hikes as the next guy but I suspect this resolution will be next to meaningless.

I've found the way California does its voting and budgets completely crazy. The people vote for popular programs and leave it to someone else to finance it. Now they find out they are out of finance options. Can't tax cigarettes, people aren't smoking enough. Can't tax gas, it's already too high. Can't tax property, don't even bother touching my paycheck. The easiest place to gain money are either too small in number (realistically, how much would you gain by taxing he rich and additional 1%, not) or too vulnerable to sales tax increase (the poor).

Also since the state is the largest employer (lots of voters there) they can't touch pensions.