Nearly a week after he first announced a fiscal emergency, Gov. Arnold Schwarzenegger met with elected officials and business owners in Santa Barbara on Friday to discuss his new statewide budget plan.

With the state facing a projected deficit of $14.5 billion, Schwarzenegger has proposed a 10 percent across the board decrease in state spending. His visit to the Veteran’s Memorial Building on Cabrillo Boulevard – attended by a laundry list of local officials, mayors and county supervisors – is just one of many stops the governor will make this month as he travels around the state to explain his proposal.

With regards to the state’s budget problems, Schwarzenegger said the trouble stems from California’s persistence in spending money that it does not have.

“We have a system in place that doesn’t work,” Schwarzenegger said. “Currently we are about $4.6 billion short … [but] by the end of June, it could be $14.5 billion. We need to be fiscally responsible by spending only what we have.”

On Jan. 11, the governor announced a fiscal emergency, which gives the state legislature 45 days to act on his recommendations. This announcement came on the heels of the State of the State address, where Schwarzenegger first publicized the proposed budget cuts intended to get the state’s spending back on track.

According to the governor, the 10 percent cut affects every state department and organization, including the three most heavily funded programs: health care, the prison system and education. When responding to questions about his plans, Schwarzenegger said he would strategically choose cuts that draw the least blood.

“With those things, anywhere you cut it’s horrible,” Schwarzenegger said. “We have to be very surgical, so we don’t hurt the people of California. [With education] we have to find a way to keep the money in the classroom and with the students. We need to find other, less important things to cut.”

He also said he would like to see the entire budget system reformed so the state does not have to deal with this problem “every five years or so.”

“We shouldn’t have to cut anything,” Schwarzenegger said. “If we had the budget system I’m proposing, we wouldn’t have to … The state can no longer borrow – steal – money from local governments and the people.”

For California, the current fiscal emergency is reminiscent of the budget crises experienced in 2003 when then-Gov. Gray Davis was recalled in a special election. Schwarzenegger said he had proposed reforms on multiple occasions since he took office, but they were all ignored by the state legislature.

“It was voted down because they don’t like being fiscally disciplined in Sacramento,” Schwarzenegger said.

The governor also said budget alternatives, like raising taxes, are not viable options.

“You cannot tax your way out of this problem,” Schwarzenegger said. “It’s a $10 billion a year problem. With my plan, I want to give people hope.”

Schwarzenegger’s new budget system would also include what he referred to as a “rainy day fund.” He said he would like to see the state put away money when the times are good to prepare for any future dips in the state’s revenue. The governor also said the state must move beyond bipartisan politics.

“We have to get [state legislators] to come together,” Schwarzenegger said. “I think I can do that. I sleep with a Democrat every night. If I can get together so intimately with a Democrat, so can the other Republicans.”

During the question and answer session, Lompoc Mayor Dick DeWees stood up and invited the governor to spend a day in his city and visit the La Purisima Mission State Historic Park – one of the 48 state parks that might close if Schwarzenegger’s proposal passes. DeWees said he predicted that if the governor were to see the park, he would not close it.

The event was hosted by the Santa Barbara Navy League and those in attendance included mayors from Buellton, Carpinteria, Lompoc, Goleta, Guadalupe, Santa Maria and Solvang. Santa Barbara County Supervisors Salud Carbajal, Janet Wolf, Joni Gray and Brooks Firestone were present, as well as 3rd District Supervisor hopeful David Smyser.