Remember the aphorism about giant oaks growing from little acorns? It's as true in politics as it is in botany, as the experience with 10 obscure words in the state constitution would attest.

Proposition 13, enacted by voters in 1978, limited property taxes to 1 percent of market value, and said that the taxes would be "apportioned according to law to the districts within the counties."

A dozen years after Proposition 13's enactment, the state was clobbered by what turned out to be the worst recession in a half-century. As state revenues plummeted, newly elected Gov. Pete Wilson and the Legislature searched for ways to close a huge budget gap. Someone -- exactly who is not recorded -- theorized that those 10 words in Proposition 13 would give the state the legal authority to reallocate property tax dollars, and thus was born the Educational Revenue Augmentation Fund (ERAF) and the state's grab of billions of dollars from local governments.

Wilson and lawmakers simply decreed that about $3.5 billion in property taxes would be shifted from counties, cities and special districts to schools, thereby allowing the state to maintain constitutionally established levels of school financing while reducing direct state aid by the same amount.

The politics of the ERAF raid were brutally simple: The "Education Coalition" had immense political clout -- thanks largely to campaign dollars distributed by the California Teachers Association -- while local governments had little or none.

Although the loss of local government revenue was partially offset by subsequent state appropriations, and the proceeds of a special statewide sales tax, ERAF remained in place even when the state was rolling in money during the late 1990s.

Local officials found themselves in another pickle when another budget crisis developed early in this decade. Last year, then-Gov. Gray Davis unilaterally rescinded a $4 billion-plus cut in the property taxes paid on cars and negotiated a deal with local governments under which they would receive the proceeds of the restored tax, but lose three months' apportionment, some $1.3 billion.

When Davis was recalled and replaced by Arnold Schwarzenegger, the new governor immediately cut the car tax again, but promised the locals that they would receive "backfill" from the state, and when the Legislature refused to appropriate the funds, Schwarzenegger unilaterally directed that the checks be cut.

Schwarzenegger's action pleased local officials immensely. Several big city mayors, including Los Angeles' James Hahn, appeared with the governor as he signed the decree and sang his praises. But last Friday, just three weeks later, Schwarzenegger shocked those mayors when, as part of his 2004-05 budget, he proposed to expand ERAF's property tax shift by another $1.3 billion a year, once again allowing the state to reduce its direct aid to schools.

By all accounts, the ERAF scheme blindsided local officials. "I know we're not supposed to admit this, but he surprised us," Hahn said this week. "All along, we were told that local government wouldn't be hurt any more than it has been in the past."

The administration clearly chose $1.3 billion as the ERAF hit because it's identical to the current year's loss in car tax backfill. Thus, Schwarzenegger can argue that he's not cutting local government revenue, merely freezing it. But the backfill reduction was for just one year -- and technically a loan to be repaid later -- while the ERAF hit would be permanent.

Local officials are howling and joining in the chorus of those who dislike Schwarzenegger's budget decisions. "This isn't a solution," said League of California Cities President Ron Loveridge, the mayor of Riverside. "It's a shell game that will force cutbacks in police and fire, emergency services, after-school programs for kids and many other local services."

Politically, the locals are taking another hit because they remain among the weakest of the major budget players. But they're also raising a bigger stink because they are pushing their own measure for the November ballot that, if enacted, would block the state from making such arbitrary raids on local treasuries in the future.

Such is the power of 10 little words.