The rule of holes says that when you're in one, stop digging. But as the state's legislative analyst pointed out earlier this month, Gov. Schwarzenegger takes the opposite approach in his budget proposal for 2006-07. Schwarzenegger's plans call for the state to spend $6.4 billion more than it will receive in revenue. Instead of closing the built-in gap between spending and income, the governor's budget would ratchet up ongoing spending by $2 billion, the analyst says. And that does not include nearly $1 billion in potential unbudgeted costs from lawsuits, salary negotiations and other liabilities. Only higher-than-expected revenue over the...