State college and local K-12 administrators said Wednesday that they could absorb a proposed $2 billion in education cuts this year but worry that future cuts could erode California's education standards.

While Gov. Arnold Schwarzenegger's Tuesday night State of the State address was short on specifics about the budget, part of his plan is believed to include borrowing about $2 billion from education to help pay for other state programs.

Schwarzenegger also called for limiting college and university fee increases to no more than 10 percent per year, and pledged funding for a 10th University of California campus, UC Merced.

K-12 and higher education officials said they hope Schwarzenegger's budget plan, which is expected to be released Friday, doesn't include any more cuts.

The Los Angeles Unified School district is facing a $536 million budget deficit. Any more cuts would be devastating, Superintendent Roy Romer said this week, comparing the district's current crisis to the Great Depression.

Administrators are being asked this week to identify cuts of up to 20 percent of their budgets for 2004-05. "There's going to be so much blood on the floor with these cuts that it's going to be extremely difficult for this board and the public to understand," Romer said.

But school board member David Tokofsky said the state's budget crisis is worse than L.A. Unified's, and that the school district should still see a state funding increase.

Under Proposition 98, schools and community colleges should have seen about a $3.5 billion funding increase next year. This plan shifts about $2 billion of that from education, but it will have to be repaid in a year, Tokofsky said.

Steve Blazak, United Teachers of Los Angeles spokesman, said the deal is good for teachers because they're trading one year of cuts for the security that comes with Schwarzenegger's support of Proposition 98.

"Proposition 98 is insurance that there won't be really, truly drastic cuts," Blazak said.

Some school officials weren't impressed with Schwarzenegger's suggestion that schools be allowed to contract with the private sector to cut costs.

"We're not quite sure what that means," said Ed Burke, a spokesman for school board member Jon Lauritzen said. "We have billions of dollars that we are contracting out."

L.A. Unified relies on private companies to run charter schools, transport students and construct schools, he said. In other areas, hiring a private company could mean lowering standards, Burke said.

Higher education officials from the community college, California State University and the University of California systems hailed the governor's call for predictable fee increases of no more than 10 percent per year, saying that would allow schools, students and their parents to plan better.

But officials said they're concerned about the specifics of the budget proposal. Colleges and universities are still struggling to deal with budget cuts from last year that forced the UC and Cal State systems to increase fees 30 percent and the community colleges to cut courses.

The CSU has announced plans to reduce enrollment growth by 4,000 students this spring, as a result of the $23.7 million midyear budget cut. The 23-campus CSU, which has approximately 409,000 students -- 33,000 of them at California State University, Northridge -- had a total operating budget for 2003-2004 of $2.49 billion.

CSUN will turn away about 100 students this spring as a result of its $1.7 million share of the midyear budget cut, said Mohammad Qayoumi, CSUN vice president for administration and finance and chief financial officer.