While Willie Brown reads tea leaves, actual votes are taking place in Sacramento.  And the budget conference committee, in the end, rejected cuts to Cal Grants and Hastings College that the Governor requested.

California took a multimillion-dollar step backward Friday in cutting its budget.

Assembly and Senate members in a budget conference committee balked at derailing the Cal Grant program of college aid or stripping Hastings College of the Law of nearly all its state funding.

By rejecting the two proposals by Gov. Arnold Schwarzenegger, however, the committee created a new $235 million headache in its bid to fix a gaping fiscal hole.

The panel is rushing to balance the state’s recession-wracked budget by curing a projected $24.3 billion shortfall.

Republicans actually claimed they were against eliminating Cal Grants but wanted to find additional offsets in the budget.  But in the end, they voted to get rid of every aid grant for 77,000 low- and middle-income California students who want to attend an institution of higher learning.  You would think that the Democrats could do something with that.

With respect to Hastings College, the budget committee averted what could have been a costly disaster.

Schwarzenegger’s Hastings proposal would have eliminated about $10.3 million in state funding for the University of California law school, leaving it with only $7,000 in general fund support and $153,000 from lottery revenue.

Sen. Mark Leno, D-San Francisco, argued Friday that the cut was much deeper than those targeting other UC programs and would raise Hastings’ annual tuition from $28,600 to about $36,600.

Leno said the cut could launch a costly court fight over terms of the law school’s creation, which called for Judge S.C. Hastings to donate $100,000 to support the campus – and for the state to pay his heirs that sum, plus interest, if the state ever abandoned its financial support.

Leno said the governor is attempting to “privatize” the law school, and if the Hastings heirs sued, the state could wind up owing more from 130 years of accumulated interest than it could save from its budget-cutting proposal.

Seriously, did anyone in the Governor’s office even think about the possibility of paying 130 YEARS’ WORTH of accumulated interest on a $100,000 contribution in order to save $10 million, and how those numbers do not compute?

I think you can see where this goes.  The conference committee is not nearly in the mood to accept the most extreme of the Governor’s proposals – I don’t think they’ll tell those AIDS activists in the streets that they can no longer get their drugs, for example.  And then we’ll have a fairly large remaining gap after the committee’s work is done.  The first pot of money the budget committee will attack will be the absurdly large $4.5 billion reserve in the Governor’s plan, essentially ignoring the will of the people not to institute a spending cap and socking away billions of dollars in the middle of a near-depression.  After that, we’re going to see a big fight.  We need to continue to leverage grassroots pressure, wedge Republicans who are  starting to waver on a cuts-only approach, and let Democrats know that they must hold the line on things like eliminating welfare and children’s health care, and incorporate a majority-vote fee increase to make up the difference.  We’re already seeing cracks in the rush to shock doctrine California.  Let’s break it open.