There is a third solution which can be coupled with a spending reduction.
The state should sell assets. The state has enormous amounts of unused land, some of it designated as "open space", "reserves" or future parks.
With the stroke of a pen, this can be turned into very high-end building sites. The public interest is preserved by developing campgrounds and public-use areas on large sections of the land while selling pieces of the land to wealthy private individuals or developers.
Rather than taxing the wealthy we get money from them by selling them something they want. Painless — except for the enviro-nuts who will go berserk.
By the way, this plan also produces a continuing future stream of property taxes, and if we can sell enought spectacular large properties it encourages people from all over the world to own a showplace estate in CA. These people will pay income taxes, bring a whole raft of jobs with them (everything from landscapers and caretakers to financial consultants), and create a construction boom by building on their properties.