"I can accept higher state taxes if it means preserving my police services and educating my children."

We're hearing this, or statements close to it, quite often lately as the state grapples with a $38-billion budget deficit.

We know why it's making the rounds. It is exactly what happens when politicians and special interests anyone other than taxpayers frame the budget debate, and its supposed solutions.

By presenting the public with only two choices, higher taxes or dramatic cuts in vital services, state politicians and special interest groups are taking a page from an age-old political storybook, absolving themselves of blame and scaring the public into believing it's up to them to solve the state's budget problems. Take your pick, people: Either pay more or prepare for a crime wave. Pay more or deal with a generation of uneducated kids. Pay more or get ready to toss frail seniors into the gutter. Are you really that cold-hearted?

What an infuriating, self- serving ruse.

Here's what is really going on in Sacramento:

1. Rampant overspending.

The state has been unwilling to play by the most basic financial rules you can't spend more than you earn without running into severe problems. During the dot-com boom politicians gave systematic favors to the special-interest groups that finance their campaigns, like the prison guards union, jacking up their budgets, salaries and pensions way beyond anything necessary for inflation or population increases. The numbers tell the real story: State spending has increased 40 percent in the last four years alone, as revenues increased 25 percent (spending for inflation and population alone would have increased the budget 21 percent).

Through some tricky accounting the state has managed to borrow its way through the last few years the equivalent of a binge spender opening one new credit card after another but it won't work anymore. Wall Street has said that the state's most recent credit card, an $11 billion line that expires in August, is its last.

2. Waste, fraud and incompetence.

While some of it is so well-hidden it will never be known, the examples of waste, incompetence and outright fraud that have been exposed to the light are shocking. Some of the state's recent computer contracts have illustrated the shameful way Sacramento does business: Hundreds of millions of dollars are thrown at political allies, contributors or other well-connected folks through lucrative contracts that generally ignore common competitive bidding practices. Massive cost overruns are paid without question, and the occasional investigation into one of the debacles Oracle, for example are actively thwarted. As the recent problems with the CSU computer system have shown, the state appears incapable of responsibly installing a major computer system.

3. Featherbedding and payback.

Have people already forgotten that the state Assembly Speaker, Herb Wesson of Culver City, was recently found to have hired six former legislators to the state payroll, for no other reason than political payback? Or that Assemblyman Mervyn Dymally, of Compton, put people convicted of election fraud on his payroll? Add to that the scores of relatives, friends and allies that are earning state payroll checks or lucrative contracts for highly dubious services, and we're talking about serious money.

And are any of these points being actively addressed? Of course not. Politicians and special-interest groups would much rather continue the binge spending because it's in their own interest.

Spending makes the interest groups happy, and when they're happy, they give politicians more money to finance their campaigns, which makes the politicians happy. It's one big love-fest until the bills come due. Then they just ask taxpayers for more.

Don't buy the lie that you must make a choice between higher taxes and devastating cuts. The Reason Foundation and other groups have proposed responsible budget plans that would eliminate the deficit over two years while maintaining education, health and public safety without raising taxes.

It involves the type of stuff that politicians and special interest groups hate to hear: Curbing the rampant overspending, consolidating overlapping departments, cutting the waste and eliminating the sweetheart deals, establishing oversight on contracts and spending, and streamlining and privatizing wherever possible.

And here's a novel idea instead of raising taxes, the state could create a job-friendly environment that would produce more revenue for the state and more jobs for Californians.

Finally, the state must adopt a constitutional amendment that would limit spending to inflation and population growth. There just wouldn't be any more room for the type of overspending and waste that is running through the state budget like a virus.

Assembly and Senate Republicans should hold firm on their anti-tax budget position. Not because it would force inhumane cuts to vital services (it doesn't have to) but because it would force Sacramento to deal with the real financial problem in this state its own self-serving overspending.

California can maintain its vital services and balance its budget without raising taxes. What it can't maintain is the cycle of overspending that rewards politicians, special interest groups and politically connected allies at the expense of the state's long-term health and financial future.