Gov. Arnold Schwarzenegger is scheduled to release his revised budget proposal this week, and for the first time in several years, the news from this annual rite of spring will not be all bad.

Income tax revenues the state received in April were about $1.5 billion above projections. Most of that was due to proceeds from a onetime amnesty for people who might be taking advantage of abusive tax shelters. A smaller but potentially more significant amount came from the continued growth in taxes withheld from current wages, a sign that employees are earning more money this year, even as job growth lags.

Withholding in February, March and April was about 5 percent above projections made in December for the governor's initial budget proposal. Even if that trend slows, it still might mean an extra $1 billion or so over the next 15 months.

The numbers Schwarzenegger decides to use in his final forecast will determine the level of spending cuts the governor has to propose. That, in turn, will shape the debate with Democrats in the Legislature who want to raise taxes to help balance the budget.

But let's back up a moment. Schwarzenegger in January was facing an estimated $15 billion gap between projected spending and revenues in the fiscal year that begins July 1. If he did nothing, the state was expecting to receive about $75 billion from all general fund tax sources while spending about $90 billion.

That sounds like an almost insurmountable problem. But Schwarzenegger is closer to bridging the gap than is commonly assumed.

Start with the bond measure voters approved March 2. Most of that $15 billion in borrowing will go toward restructuring the state's existing debt, but Schwarzenegger has set aside $3 billion from the bond to help balance the coming year's spending plan. And because his bond will have lower annual debt service than similar borrowing planned by his predecessor, the governor saves another $1.3 billion in payments to the creditors in the early years of the repayment.

That whittles his problem down to about $11 billion.

Schwarzenegger, meanwhile, struck an early deal to get the education lobby's support for a $2 billion reduction in the growth of school spending next year. That agreement, which would leave the schools with enough to keep up with enrollment growth and inflation, is likely to be approved by the Legislature, and would reduce his problem to about $9 billion.

The governor hopes to get another $1.3 billion by shifting tax dollars from local government to the schools, thus relieving the state of part of its obligation to public education. That would reduce his gap to less than $8 billion.

Proposals to cut funding for higher education and transportation are more controversial but still doable. This would mean fewer students entering college and higher fees for those who do, and a slowdown in road and transportation projects.

Together, the two areas would net almost $2 billion in the coming year. So let's put the remaining gap at $6 billion.

The next $3 billion or so would come in smaller chunks from a variety of measures - revenue from Indian gaming, cuts in the prison system and the state bureaucracy, shifting money from other funds. The precise proposals in the governor's January budget might not survive as he laid them out, but it is safe to assume that he will substitute new ideas of the same magnitude for any that won't work or can't pass in the Legislature.

The final $3 billion looms as the toughest part of this task for the governor. That amount matches the level of cuts in health and welfare programs that Schwarzenegger has proposed. This includes limiting eligibility for the Healthy Families program that insures children of the working poor, slicing aid to the developmentally disabled, reducing grants to the disabled elderly and welfare recipients, and cutting reimbursements to doctors who care for the poor.

This is the kind of stuff that many Democrats in the Legislature say they simply will not do. And the truth is, Schwarzenegger really doesn't want to make these cuts if he can avoid them. Even the Republicans in the Legislature who talk tough on budget matters would rather not vote for those reductions. Look for many of those proposals to be substantially modified or abandoned in the governor's revised budget.

Schwarzenegger will likely plug that part of the gap with the increased income tax returns, hoped-for federal funds and revised health and welfare proposals that would reduce spending growth in ways that can attract more support in the Legislature.

If he can do that, he can probably get a budget passed on time this spring, without raising taxes.