Governor Schwarzenegger proposed a new list of deep reductions in state spending today, including more prisoners to be released early, a scrapping of a stalled state worker labor agreement, and new cuts in medical care for the poor.

And that won't be all; aides to the governor say he'll propose an additional $3 billion in spending reductions later this week.

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BUDGET DAY PLUS 15 -- With legislative leaders again gathering, and adjourning, with no resolution to the state's budget woes today, we can at least give thanks for a new boost to the Napa wine industry.

Governor Schwarzenegger signed two bills into law today affecting the nation's most famous wine region. AB 2004 will allow more wineries to sell vino that can be consumed on the premises. Current law has tied most imbibing to wineries that also have a restaurants or bistro. The bill sailed through the Legislature with no opposition.

AB 2266 gives Napa County an extra 15 licenses for the sale of alcohol over the next three years. The state Department of Alcoholic Beverage Control ties the number of licenses to a county's population, which sometimes means the rare licenses are sold and re-sold for a hefty price. Folks in Napa complained that the county's population growth has remained fairly flat, while more and more tourists flock to the area looking for food and drink. The bill was supported by everyone, it seems, but the owner of two Napa restaurants who argued the extra licenses would "flood" the license market and "devalue" his investment.

Both bills were authored by Assmeblymember Noreen Evans (D-Santa Rosa).

Perhaps we should all make a road trip to Napa and bring back a gift for legislative leaders still split over the budget. After all, they've often joked in the past that budget talks are best paired with a nice wine.

Speaking of those talks... the governor has scheduled a meeting tomorrow with the four legislative leaders for a so-called "Big Five" confab.

On the surface, the pitched PR battle waged today between Democrats and Republicans seems like it's flavored with a dash of the same old spin.

But in reality, it goes to the heart of the literal budget problem that's plagued California's statehouse for years: a stalemate caused by virtually incompatible political ideologies.

Today's first volley was fired by Republicans. In a morning news conference, GOP legislators placed plans for a new government spending limit on the negotiating table. The proposal outline calls for a constitutional amendment to limit the annual growth in budget expenditures to the percentage change in California's population growth and inflation. Any revenues above that estimate would be automatically transferred into a reserve fund earmarked for resolving budget shortfalls and/or debt repayment.

That part of the proposal is a dead ringer for plans submitted in 2003 by both a former GOP legislator and one backed by the newly elected Governor Schwarzenegger after the 2003 recall. Those plans used the same "cap" formula, one that a 2003 analysis by the California Budget Project suggested could result in extra deep cuts to almost everything but public school funding, which would still be protected by the Proposition 98 guarantee. But the proposal differs from the latest call for budget reform by the governor, whose much-ballyhooed plan focuses on revenue forecasting.

The dilemma of which side of the ledger to focus on is why today's skirmish is really a clear view of the chasm between the two parties. For several years, legislative Republicans have stuck to a saying that Schwarzenegger himself latched on to during the 2005 special election: "We don't have a revenue problem, we have a spending problem."

Senate GOP Leader Dave Cogdill put it even more bluntly in comments to reporters this morning: "This state has a spending addiction."

An hour later, Democrats took Republicans to task, using-- for the first time I've heard-- the exact converse of the now well-worn GOP adage.

"We don't have a spending problem," said Assemblymember Noreen Evans (D-Santa Rosa). "We have a revenue problem." Democrats are pushing hard for a solution this year that includes some new source of revenue... as much as $6 billion... to pay for the state services that they say everyone in California, regardless of party, is demanding.

Some of this divergence in world views is clearly due to a dispute over just what kinds of factors should be considered when building a state budget. Should spending decisions only be made once revenues are known? Should the state first decide what services it values and then figure out how to pay for them? Should spending be tightly linked to the budgets of years past? Or should it be flexible -- both in tax increases and tax cuts -- depending on the needs of the time?

That's the problem that's kept several years worth of budget talks dragging into the sizzling Sacramento summer. And it's the problem that threatens to do the same this time, too.