Nail parlors and smoggy vehicles could get fewer inspections under a little-known borrowing plan proposed by Gov. Arnold Schwarzenegger, according to advocates opposed to his budget.

The governor's latest plan to close a $15.2 billion budget gap in the state's $101.8 billion general fund would dip into pots of money in "special funds" intended to further the state's regulatory and environmental cleanup efforts.

Schwarzenegger is promising to repay most of the $574 million in special funds within three years, but consumer and environmental activists said they are wary of the promise, given the state's spotty repayment record when similar moves were made in the past.

"At some point it ceases to be a loan and it's just a raid," said Rosemary Shahan, president of Consumers for Auto Reliability and Safety, a consumer vehicle protection group.

Among the special fund borrowing the governor has proposed:

• $25 million from vehicle inspection fees to administer the Smog Check Program.

• $40 million from smog abatement fees to repair or retire vehicles that have failed a biannual smog inspection.

• $2 million from memorial license plate sales to train law enforcement and respond to public threats.

• $10 million from fees and fines collected through card room regulation.

• $10 million from industry fees to inspect salons, barber shops and nail spas.

Other shifts and borrowing would take money intended to protect habitat and prevent oil spills, like the one after the Cosco Busan ship struck the Bay Bridge on Nov. 7.

"If the money is taken away, we won't have funding when we need to protect our air, water and coastal wetlands," said Bill Magavern of the Sierra Club.

Administration officials said the governor is proposing to take reserves that would not hamper existing programs.

And it remains to be seen whether Democrats, who hold a majority in the Legislature, will go along with the proposed loans. While the Senate opposed the loans, the Assembly approved them. The two houses will have to reconcile their differences.

Assemblyman Juan Arambula, D-Fresno, said that given the state's fiscal challenges, his budget subcommittee on consumer affairs has reluctantly approved $116.5 million in loans from funds over which it holds jurisdiction.

"I'm not thrilled about the idea of loaning special funds to the general fund," Arambula said. "I think we are faced with some very difficult circumstances, however."

Schwarzenegger's finance spokesman, H.D. Palmer, said most of the money will be repaid by the fiscal year 2011-12. Palmer said the administration has proposed to take only reserves, which he said would have no impact on the state's inspection efforts.

Shahan, the consumer vehicle advocate, said the state has already borrowed over $100 million in the past five years from the High Polluter Repair or Removal Program and Vehicle Inspection and Repair Fund.

"Those still haven't been repaid," she said.

Shahan said the state collects about $50 million annually from smog inspection fees. That money furnishes financial assistance – between $1,000 and $1,500 – to people to repair or retire vehicles that fail smog checks. The state retired about 16,000 vehicles in 2006-07.

"We should be retiring more of these vehicles," Shahan said.

Fred Jones, who represents the Professional Beauty Federation of California, said that by taking the special funds, the administration is stripping the state government's ability to protect consumers.

Jones said the state Board of Barbering and Cosmetology has just 18 inspectors overseeing 476,000 licensees, including barbers, cosmetologists, manicurists, aestheticians, electrologists and the places where they work. The extra cash, he said, could be used to bolster the state's inspection team.

Kristy Underwood, executive officer of the state Board of Barbering and Cosmetology, said the governor's proposed loans would not slow the board's inspection efforts. In fact, she said the board plans to add seven inspectors next year.

Still, the Legislature should reject the loans because they don't help address the state's underlying gap between revenues and spending, said Michael Cohen, an analyst in the Legislative Analyst's Office. Cohen said the move simply delays the problem, and the state would still be on the hook to pay interest.