In light of all the praise Gov. Arnold Schwarzenegger is receiving for keeping his word to continue funding local government, it is important to take a step back and review the nature of our state's budget crisis.

The Legislature knew this past September when we passed the budget that we would face an $8 billion deficit in the coming fiscal year. That hole grew to approximately $14 billion on Nov. 17, when the newly sworn-in governor signed an executive order that rescinded the increase of the vehicle license fee, otherwise known as the car tax. This was clearly a popular first step for the new chief executive to take, but was it fiscally wise or prudent?

Schwarzenegger had repeatedly stated during his campaign that the problem in Sacramento was the Legislature's spending addiction and that he would stop spending money the state did not have. Ironically, his first official act as governor was to spend billions the state did not have.

Given that the proceeds of the VLF go directly to cities and counties to cover the cost of fire and police protection, park maintenance, street sweeping and libraries, any interruption of those funds would have serious consequences. Unfortunately, the governor had no stated plan to provide for local government to replace the fee. He even suggested that it was the responsibility of the Legislature, and not him, to fill the increased deficit hole he had dug.

With an $8 billion shortfall in front of us, the Legislature had no resources to tap. Not surprisingly, police and fire chiefs held press conferences last week warning of fire station closings and fewer police on our streets. At least 10 mayors are threatening to sue the state. The situation became urgent when the monthly VLF checks to local government that arrived on Dec. 10 were slashed. Though an unnecessary crisis had been created, a solution was imperative.

So the governor quickly came to the rescue of his personally created predicament by proclaiming a public safety emergency and invoking extraordinary powers to make budget cuts sufficient to cover local governments' immediate needs. State law allows him to do so independently, without any legislative or public review or comment. Subsequently, there is no way of assessing whether his cuts make sense or will result in even greater future costs.

It is worth noting where Gov. Schwarzenegger intends to find the necessary billions of dollars. If he eliminates the transitional food stamp program, not only would those most in need of nutrition suffer, but the state would lose $202 million in federal funding. By capping the Healthy Families Program, which offers health insurance to millions of children from working poor families, counties are certain to incur huge costs at their general hospitals when children fall victim to diseases that could have been prevented. Similarly, by capping the AIDS Drug Assistance Program, the state might save $5,000 per patient, but counties would then have to spend hundreds of thousands on those patients when lifesaving medications are no longer available and they fall critically ill. Reductions in In Home Support Services only mean that counties will bear the cost of much more expensive long-term institutional care.

Who is fooling whom? All we are doing is taking limited dollars from one pocket and putting them in another. This is hardly a solution. The fact is that we paid the VLF from 1948-1998 to ensure that local governments would have the resources they need to provide vital services. In 1998, the state split the fee with taxpayers at a time of surplus, with the understanding that when there were no longer sufficient state funds, taxpayers would again make up the difference.

Schwarzenegger has mistakenly prevented that occurrence. By allowing our elected leaders to so demonize the VLF to satisfy our immediate gratification does not serve the greater good. Let's have an honest public conversation about the realities of our collective needs. Ignoring social ills does not make them go away. They only return at greater expense to us all.

Mark Leno is state assemblyman for District 13, which includes the eastern half of San Francisco.