Gov. Gray Davis says he was happy with the budget he offered California in January, and there is no reason he shouldn't have been. His plan tackled the state's enormous deficit with a strenuous combination of spending cuts and tax increases. It was a real, if unpleasant, solution, one that would have largely put California back into long-term fiscal balance.
But Democrats and Republicans in the Legislature, afraid of angering their voters and their special-interest contributors, hated it. Seemingly every group in the state trooped to the steps of the Capitol to protest their share of the pain. And while everyone yelled, the governor, instead of barnstorming to sell his plan, huddled out of sight and watched his poll numbers tumble.

It came as no surprise, then, that Davis went back to lawmakers on Wednesday, on bended knee, with a revised budget tailored more to lawmakers' bipartisan wish to duck and defer and borrow. "Part of leadership is listening," Davis explained. All the governor asks is that they duck and defer quickly, passing a budget on time next month so that the state can borrow nearly $11 billion to keep running.

Davis is right about the need for speed. A quick agreement is essential if California is going to put together a bailout bond to prevent the state from running out of money this summer. With the governor's surrender, it's a given now that California will have a pretend budget this year. There's nothing to be gained, and much to be lost, by delaying the pretense. Making it late won't make a bad budget better.

It has been clear all along that, having dug a financial hole the governor says is $38 billion deep, Davis and legislators wouldn't be able to pull the state out in one year. Few budget analysts doubted that the budget could get passed without the kind of gimmicks and borrowing former Gov. Pete Wilson used as part of his package in the fiscal crisis of the early 1990s.

The key question for the state is not whether a final plan contains some borrowing to pay off deficits past, but whether the governor and lawmakers make state income and outgo balance next year and into the future. Davis' May budget revision, bowing to lawmakers' wishes, doesn't do that.

Even if you assume, as the governor does, that the full vehicle license fee is back for good, the state has an ongoing budget gap of about 10 percent out into the future. The governor wants lawmakers, after they pass an on-time budget needed to get to Wall Street and its cash, to address that gap later this summer.

There's fat chance of that. Legislative Republicans are already saying that they refuse to negotiate over taxes, including the temporary half-cent sales tax that would pay off the deficit rollover they proposed and that Davis has reluctantly embraced. But they also oppose some of Davis' proposed spending reductions, including nearly $1 billion worth of cuts to Medi-Cal. If there's any hope this year of winning a credible budget solution in the face of such Fantasy Land thinking, it can only come in the next six weeks, with the threat of immediate financial collapse as the hammer.