Fix the budget. Compromise. Use your fame.

To: Arnold Schwarzenegger

From: Prominent Californians who know what it takes to lead.

Re: What now?

This, one would assume, is what you wanted. You are now the Governator, the Collectinator, or the Whatever-in-Chief you want to call yourself. Now it's time for business.

Obviously, you've got some ideas. In one day, you repealed the car tax and called for a special session of the Legislature to deal with the budget, workers' compensation, and driver's licenses for illegal immigrants.

This memo is just to make sure you don't veer too far off into some sort of Conan complex. Consider it a Cliff's Notes for a successful administration - the four things that you must do to turn California around, according to some of the best thinkers in the state.

The good news is that, in some important respects, you're off to a good start. From bipartisanship to the deficit, you've talked about the right things and set the right tone. The bad news is that, from here on out, you can't use swords or chokeholds if things go wrong.

No. 1: Balance the budget.

If there is one good thing about this budget mess for you, it is this: There is no ambiguity about what you're in Sacramento to do. Car taxes and driver's licenses are nice, but you were elected to solve the budget crisis. If the state is billions of dollars over budget when your term is up, Californians will give you the worst review of your life - and a one-way ticket back to Hollywood.

"The most important responsibility is to present a credible budget," says Leon Panetta, White House chief of staff for President Clinton and current director of the Panetta Institute for Public Policy in Monterey, Calif. "[It must be] one that honestly addresses the issue of cutting spending and raising revenues."

It's true that an improving economy might help, but your own finance chief says that even with modest growth, if spending habits don't change, California could be running $62 billion deficits by 2006. Unless you're planning on making 120 more Terminator films and donating the box-office receipts to the state, that means change.

Since the inauguration, it's clear what the plan is: Borrow as much as $20 billion to defer current debt and implement a spending cap to bring revenues and expenditures into balance. The cap is, at least, an attempt at a long-term solution to the state's chronic overspending. But the plan is also the clear path of political expedience.

Take your own advice. Bipartisanship isn't just listening to other people; it's working out a compromise. Maybe that means a tax increase to help pay for the deficit. Maybe it doesn't. But it means keeping all options on the table. And who knows? You might fix more than the budget along the way.

No. 2: Mend Sacramento.

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