Lately, Governor Arnold Schwarzenegger has begun to move away from his staunch no new taxes rhetoric towards softer language that leaves the door open to a more politically palatable position of "revenue increases." Two weeks ago this blogger pointed out that the Yacht Party approach to balancing the budget by cutting essential services to the bone garneredvery little support, in the state, even amongst its own base.

With such little support for bone cutting budget balancing which could result in further reducing the quality of our public education and basic social services, the governor is reading the tea leaves and is becoming more open to the idea of raising revenues to close the deficit.

Up till now, he has repeatedly held the line on the misnomer that the state has a spending problem, not a revenue problem, therefore we have no need to raise taxes.

In that vain, Republican legislators even refused to close tax loopholes which benefit yacht owners. But the deficit remains, and a workable solution is needed.

TheSacramento Bee published the announcement of the governor's new position on tax increases yesterday, Schwarzenegger told a Modesto audience on Tuesday: "We have to find revenues this year, because I don't think that we can do everything through cuts. So I think that legislators have to get very creative, because I dislike raising taxes."

I don't think anyone enjoys raising taxes, but something must be done and the governor should be straight up about his new position on balancing the budget. Californians are too sophisticated to believe that fee increases and new taxes called fees are not increased taxes as he argued during the debate about who would pay for his healthcare reform.

Clearly cuts are inevitable, but they must be balanced with revenue increases in the forms of higher taxes, closing loopholes and establishing new fees for certain state services. Our duly elected governor should lead the way.