Newsflash: Arnold Will Raise Your Taxes **

"I guarantee there is some meat on the chicken."

That was Arnold Schwarzenegger's characteristically colorful response to a question from the Daily News editorial board today about whether the state can dredge up more revenues by closing "loopholes" in the tax code. By "meat on the chicken," Schwarzenegger means cash -- he's sure there's more of it, somewhere, for Sacramento to scoop up.

But doesn't Arnold oppose tax hikes? Hasn't that been his signature position, the one resolute stance that makes him palatable to the state's increasingly irritated Republicans?

Well, it was ...

"I would never begin negotiations by saying this (or that) is is off the table," Schwarzenegger now says, implying that in budget talks with legislative Democrats, new taxes will certainly be considered. Indeed, "There will be so many things on the table it will be like we're in the candy store."

Still, Arnold knows better than to actually say he supports tax hikes. When asked the question directly, Schwarzenegger interrupted and remarked only that he's willing to close those aforementioned "loopholes."

But the meatiest of all the "loopholes," at least according to State Legislative Analyst Elizabeth Hill, is the home-mortgage deduction -- which is anything but a giveaway as far as middle-class homeowners are concerned. Eliminating it would be nothing but a tax hike for millions of Californians. And when pressed, Schwarzenegger specifically declined to say the home-mortgage deduction was off-limits.

Which is to say, tax hikes for everyone will soon be on the table at the Sacramento Candy Shoppe. And Arnold's days as an anti-tax warrior are numbered ...

** UPDATE ** -- 3:55 PM -- Just got off the phone with gubernatorial aide Matt Davidson, who wanted to clarify Schwarzenegger's position: "The governor does not believe the home-mortgage deduction is a loophole, but is open to debating all ideas at the table with leaders to solve the '08-09 budget deficit."