Gov. Arnold Schwarzenegger's proposal to cut the state budget by $14.5 billion is too new for local governments to know for sure what kind of an impact it may have, but their advisors fear it nonetheless.

Both the California Association of Counties and the League of California Cities are busy analyzing Schwarzenegger's budget, which avoids explicit raids on local finances, but contains cuts to some popular programs, including education and parks, and orders the early release of some 22,000 prison inmates.

"This is a budget that doesn't please everybody, I know that for sure," Schwarzenegger said last week. "But I think this is the fairest way to go."

Democrats and Republicans have seized upon the budget to criticize its cuts to programs viewed as crucial to each party. For Democrats that means education, and for Republicans, the idea of letting 22,000 inmates go free is hard to stomach.

But for the state's cities and counties, the fiscal mess means fear of a time-honored Sacramento tradition -- cuts to local programs and state raids of local tax revenues.

"Counties recognize -- and, can certainly empathize with -- the extremely difficult fiscal situation that the state is now in, and we understand reductions in program funding will occur," said California State Association of Counties Executive Director Paul McIntosh in a prepared statement. "However, our counties are already being impacted by long-standing state reductions to critical programs and services, including those delivered on behalf of the state."

Local government advisors have already glimpsed some local cuts in the budget.

For example, about $500 million is proposed to be slashed from payments derived from gas taxes to local governments for a five-month period. Eventually the money has to be paid back, but in the meantime cities and counties will loose $100 million per month in money they count on.

Eva Speigel, a spokeswoman for the League of California Cities, said the state is also considering cuts to some popular community policing programs, which have also taken hits from federal budget cuts.

Don Peterson, the county's lobbyist, said in his years of watching Sacramento politics one thing about budgets remains true: The governors get about 90 percent of what they propose.

Rumors around Sacramento have pegged Schwarzenegger's sweeping cuts -- with no mention of possible tax increases -- as the first bold move in a budget chess game where the governor's ultimate goal will be to change the entire budget process.

To do that, he must get approval from both Democrats and Republicans on changing the state Constitution. Typically in budget debates, the holdouts have been the Republicans, standing fast to their anti-tax pledges. Some Capitol watchers have pegged the governor's proposal as fated for a sure-fire defeat in the Democratically controlled Legislature. That defeat would allow Schwarzenegger to go back to his party and advise them to seek another alternative -- like tax increases.

"That certainly is one way you could look at it," Peterson said. "I think the fallacy of that is that the Republicans in the Legislature have taken such a long stance against tax increases that there will have to be something substantial to alleviate their concerns about tax increases."

Something like time limits on the increases or a serious turnaround in voter-approved automatic funding formulas for things like education.

"I'm reading into this, but I just don't see that Republicans are going to vote for a tax increase to solve the budget crisis on a one-time basis," Peterson said, adding the GOP would likely need guarantees that structural changes to the budget would guarantee a balanced budget over the long-term.

Do that, however, and the state's Democratic majority may not like the results.

"There is a huge amount of reticence on the part of Democrats to treat every program the same," he said, adding education funding will probably take a priority with Democrats over parks funding.

Schwarzenegger holds more power over the state budget than President Bush does over the federal budget. Unlike Bush, Schwarzenegger can change budget language and has line item veto power over money for state programs. Yet he can't add to the budget in any way.

In the end, Peterson said, Schwarzenegger did two things with his proposal. One, he complied with a constitutional mandate to propose a balanced budget and two ...

"He knows full well it's not going to pass the way he set it out," Peterson said.