The 2005 budget that President Bush proposed last week continues the time-dishonored practice of counting federal revenues on one side, ignoring some spending on the other, and - most misleadingly - combining Social Security with ordinary spending.

Officially, the $2.4 trillion budget contains a $363 billion deficit, but if the current surpluses in Social Security were to be discounted, the actual gap between income and outgo would be more than $600 billion, as only those reading the budget's fine print would discover.

Once, California's state budget was a model of clarity. General revenues, such as those from income and sales taxes, were placed in one pot and those from special taxes were placed in special funds. Thus, for example, taxes on gasoline went into the state highway account and were spent solely on transportation programs.

No more. The 2004-05 budget that Gov. Arnold Schwarzenegger unveiled last month continues the state's march toward the misleading federal system. While maintaining the fiction of general and special funds, the budget moves money around with impunity - including raids on special funds and local government treasuries - to bring income and outgo into theoretical balance.

Take, for example, a convoluted set of maneuvers involving property and sales taxes. Schwarzenegger is campaigning for a $15 billion bond issue in the March 2 primary election to refinance part of the $25 billion debt that the state amassed during three years of deficit spending. If voters were to approve the bond, lenders would be repaid from a quarter-cent of the sales tax that now goes to cities and counties - about $1.2 billion a year. The local governments would be reimbursed for their losses by a shift of property taxes that now go to schools and the state would make up the losses to schools from the state's general fund. Capitol insiders call it the "triple flip" and say it's needed because lenders are insisting on a "dedicated revenue source" to retire the bonds.

That's complicated enough, but it's compounded by a second triple flip in the governor's budget, shifting another $1.2 billion in property taxes from local governments to schools, thereby allowing the state to reduce its school aid by $1.2 billion. Since one shift offsets the other, the effect is that local officials would have to make the spending cuts to pay for the deficit bond that refinances four years of irresponsible state budgeting.

Nor is that the end of Schwarzenegger's hide-the-pea maneuvers. He also continues the raids on special funds - those set aside for transportation projects, especially - to close the general fund gap. He would drain virtually every uncommitted dollar from the transportation funds and then issue more bonds, backed by future federal transportation aid, to keep some of the projects rolling.

The fundamental dishonesty in both federal and state budgeting practices is more than an academic point. When federal politicians use Social Security trust funds to soak up operating deficits, or when state politicians raid highways and other special funds, it feeds popular cynicism and makes voters less willing to trust the political system.

Even if the state's transportation programs were receiving all the proceeds of gasoline taxes, they would still fall short of the real need for building highways and other projects. But would voters go along with a needed boost in gasoline taxes if they believed that the money would be shifted into other spending? By the same token, sleight-of-hand shifts of state, local government and school funds - which result in cities and counties eating a loss of more than $1 billion a year - make local voters more reluctant to accept increases in local taxes, such as the countywide parcel tax now being considered in Sacramento County. Local officials would be asking local voters to increase their taxes to pay, in essence, for the state's irresponsibility, thereby allowing the governor and legislators to skate.

The Schwarzenegger budget is, in many ways, an improvement over the wholly duplicitous budgets that his predecessor sanctioned. But California will not return to fiscal health until it stops emulating the federal government's shifty budget-writing.