News outlets reported earlier today that Legislative leaders and Gov. Arnold Schwarzenegger have reached a tentative deal to close the state’s projected $40 billion overspending problem.

Negotiations clouded in secrecy, apparently because many Californians and interest groups would oppose what was being agreed to if they found out about it. Previously, Gov. Schwarzenegger said he would proceed to lay off 20,000 state workers if no state budget deal is reached by Friday.

To make matters more convoluted, California Gov. Arnold Schwarzenegger’s office said there’s no budget deal yet.

Let us hope that any agreement tackles the real issue – chronic overspending. In the last 10 years California’s spending has gone up by a whopping 92%. Golden State lawmakers have paid for this spending spree by pushing financial decisions down the road, using accounting gimmicks to hide deficits, and relying on borrowing and bonds to pay the bills. California can not blame its huge deficit on the recession, tax revenues, the stock market or any other excuse. Rather, it has only itself to blame.

Let us hope that any agreement will for once address the real structural problems plaguing the state.

A vote is scheduled for Friday. Stay tuned for breaking news on the California budget deal…