Gov. Arnold Schwarzenegger signed a 27-bill “good, bad and ugly” budget-balancing package on Tuesday that imposes deeper cuts in programs that range from operating state parks to preventing AIDS and puts aside a relatively paltry $500 million reserve.

“This has been a very tough budget, probably the toughest since I have been here in Sacramento,” the governor said as he signed the bills before a horde of reporters and aides packed into a Capitol conference room.

The governor also warned that more cuts might be in the offing if the state’s economy continues to deteriorate. “We are not out of the troubled waters yet,” he said. “We are ready if our revenues drop further to make the necessary cuts to again live within our means.”

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