I opened to the front page of the paper Thursday morning to find the lead headline delivering another tale of California doom: "Growing budget gap seen," it declared.

Reading the story, I learned that, even after Governor Schwarzenegger closes the college door on thousands of students and caps access to health care for the children of working families, California will still have an ongoing budget gap of $7 billion, according to Legislative Analyst Elizabeth Hill.

That's too depressing before coffee, I told myself. So I turned to the Metro section to find cheerier hometown news. And there I found it: "Metro Fire to get 27 percent pay hike," the headline announced.

Isn't it nice, I mused to myself, that we here in Sacramento don't have to live in that nasty place the front page calls California. Because if we lived in California, a place buried deep in the fiscal muck, surely no government would be handing out 27 percent raises. Right?

Unfortunately, no. More and more, the schizophrenia between the story on the front page and the story in Metro defines California as a political community.

It's a place where political institutions are unable to put first things first, where the demands of interest groups and calculations of political gain trump common sense.

It's a place where city officials wail one day at the possibility that cities will lose some of their revenue from the state, with drastic consequences for public safety. And then the next day they propose to use tax money to subsidize a basketball arena to further enrich multimillionaire sports owners and players.

It's a place where the governor one day tells us the state is too poor to let all eligible students go to the University of California and California State University, and then, a few days later, Sacramento Mayor Heather Fargo says her city should use tax dollars to subsidize the construction of 18 downtown movie screens on K St.

Think hard before you answer: When was the last time you had a hard time finding a movie to attend? How many other Californians are getting 27 percent pay raises? Is it more important to California's future to use tax dollars to educate the next generation, or to amuse it?

Before the policy wonks begin complaining, let's all be clear on the mechanics here. The finances of a special district like the Sacramento Metropolitan Fire District are nominally separate from the state general fund, the epicenter of California's financial temblor. The money to subsidize movie theaters downtown would come out of the redevelopment agency, not directly out of the city general fund or from state dollars.

But the political reality is that most Californians don't know about those mechanics, and don't care. When they see money being spent for extravagance or low-priority needs in one public place, they get cynical about government as a whole.

That cynicism is often overdone. By its nature, government will never be as efficient as the best private firms, but neither is it as wasteful as people imagine. But people are right to see a connection between 27 percent pay raises for firefighters and California's larger fiscal woes. State government, cities, counties and special district are linked through a hydraulic system of dollars and law.

Metro Fire may indeed have such a surfeit of property tax dollars that it can give 27 percent pay raises, but it's state law that sets how much property tax Metro Fire receives. It's also state law that lets cities divert property tax dollars to redevelopment that would otherwise be available for education and health care.

To the average person, California is is not just the $75 billion state general fund, but also the $21 billion the state spends from special funds. It's the $39 billion spent by cities and the $33 billion spent by counties, the $5.3 billion spent by special districts and the $5 billion spent by redevelopment agencies.

At its source, those rivers of money flow out of the same reservoir, the taxpayers' pockets, and they know it. And anybody who read the paper last week can see that California is making no concerted effort to route its financial flows toward the places that have the strongest claims on the money, and away from those where the priorities are lowest.

That helps explain, I think, why Schwarzenegger is having such a hard time convincing California voters to take the unprecedented step of approving $15 billion in long-term debt to bail out leadership failures at the state Capitol. The latest survey by the Public Policy Institute of California, released last Friday, shows Proposition 57 trailing, with only 38 percent of voters in favor.

The poll suggests that many people don't believe the governor's warnings of financial Armageddon if the measure fails. They can see that, three years after the popping of the tech bubble left the state budget in a mess, California is still not acting as if there's a crisis.

How bad can things be, they have to wonder, if a new governor's first act was to cut taxes by $4 billion a year? They see a Legislature with little appetite for the politically unrewarding task of reforming government so that the weak claims of their supporters - the public sector unions wanting pay raises and the developers wanting subsidies - have to be weighed against higher priorities like education and transportation.

The doubters know there's room in the $178 billion universe of government to do some things better and low-priority things not at all. Until California's elected leaders avail themselves of those opportunities, it's going to be hard to convince them to give government more money - through either taxes or borrowing.