The first concession demanded by Schwarzenegger was crucial. It broadly strengthened the budget reform measure expected to be put before voters in March 2009 by making it more difficult for the Legislature to raid a budget “rainy-day” fund in good economic times.

This has real promise to end the boom-and-bust cycle of state budgeting – in the long term. In the short term, however, it does nothing to wipe out the $6 billion or more annual structural deficits that loom as far as the eye can see.

That deficit can be reduced and eventually eliminated if state leaders finally take a hard, determined look at spending. Even in this year's budget fight, the longest ever, that didn't happen.

Consider the $600 million now spent as a requirement of a 1998 proposition on programs to benefit children under 5. This money is now used in random, unfocused fashion by 58 counties.

Or consider the stunning fact that at least $15 billion in school spending is for one-size-fits-all mandates that Sacramento imposes on all districts – “categorical” spending that is subject to little or no scrutiny or evaluation. These dubious mandates are why, in a 2006 survey, California school superintendents preferred more spending flexibility to more funding by a 3-to-1 ratio.

The governor used to push hard for sweeping reforms of categoricals. No more – not since the chief defender of the Sacramento status quo, the California Teachers Association, buried his 2005 special election reform campaign.

Which brings us to the second concession achieved and celebrated by Schwarzenegger: the scrapping of a classic gimmick that would have generated $1.6 billion by increasing tax withholding, with the money refunded in a future budget.

This gap is filled in by doubling now-minor penalties on corporations that are late in paying substantial tax bills that date back to 2003.

But this, too, is basically a one-time windfall, not a long-term budget solution of any kind.

Yet this is where we're at in the budget debate – the governor bragging that he's come up with a better way of avoiding the state's real problems than the Legislature.

We need to have a much more substantive debate on the 2009-10 budget – and we need to have it well before the 2009-10 fiscal year begins. The sooner it starts, the better.

Education and prison spending must be examined in detached fashion, free of the emotion often ginned up when schoolchildren and crime are involved.

Public employee compensation needs to be reviewed with taxpayers' concerns at the forefront, not unions'.

Proposals to claim ever more of the general fund with costly bond measures must only be considered if they are absolutely crucial.

Given their recent history, expecting California's leaders to act in such a constructive manner may be a long shot. But until they do, this state is unlikely to ever have an honest budget.