Governor Arnold Schwarzenegger’s announcement that the current fiscal year budget is already $5 to $7 billion dollars in the red may have repercussions beyond the expected legislative budget battle.

With the budget heading toward another large deficit (including the projected structural deficit of an additional $7 billion-plus), the governor is suggesting across the board spending cuts again.

That will not sit well with the spending lobby, which has been mulling over tax raising initiatives in light of the polling numbers that indicate little interest in more taxes from the voting public. The cost of a full on initiative drive has made a number of the big money players have second thoughts about launching campaigns given the sour mood of the public and the down economy. Money is even in short supply for political wars.

However, the governor’s pronouncement will surely become part of the calculus when public employee unions and other pro-tax organizations decide whether to go ahead with tax increase measures. They’re thinking a roll of the expensive campaign dice might be worth the gamble when facing more deep cuts.