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Lower-than-expected deficits have almost nothing to do with Schwarzenegger's holding down spending. They have almost everything to do with the surprising vigor of the economy, which has pumped many extra billions of dollars into state coffers. The nonpartisan legislative budget office pegs the windfall of unanticipated revenues at $11.5 billion over three years.

I know next to nothing about the California budget issue, but if I'm interpreting this right then I'm a little confused. Haven't the Democrats been painting a dismal picture of the economy? How could there possibly be 'surprising vigor' in the California economy?

I hope that the disallusioned CA Republicans will at least throw this back in the Democrat's face. In effect, in order for them to make Arnold look bad, they have to make Bush look good.

How could there possibly be 'surprising vigor' in the California economy?

Read up! It is eye opening. Here are some resources:
href="http://www.freerepublic.com/focus/keyword?k=calbudget
href="http://www.lao.ca.gov/analysis.aspx?year=2006&chap=0&toc=0

The short answer to you question is that revenues are not "surging," but are temporary and we are indeed hanging on a thread. A downturn in the real estate market, or other, and we are in a serious spot. The LAO points out that many of the revenues are temporary, resulting from a tax amnesty plan and other non-recurring revenue sources. It was also reported that California ended the 2004-05 fiscal year with a surplus of over $9 Billion. Instead of using it to pay down debt or to improve infrastructure, or set it aside while eliminating the structural deficit in the budget process, much of it has been used to fund new social programs and other new recurring expenditure levels. By the end of the budget year, that $9 Billion was projected to dwindle to only $613 million.

I hope that the disallusioned CA Republicans will at least throw this back in the Democrat's face. In effect, in order for them to make Arnold look bad, they have to make Bush look good.

High spending and/or irresponsible borrowing, whether promoted by Democrats or Republicans, is commonly denounced by conservatives on these threads.

FYI, here is the current outlook according to Sacramento Bee journalist Dan Weintraub's blog, based on the Governor's January Budget proposal:

Finance Director Michael Genest got back to me and said he misspoke when he said the operating deficit would be $5.5 billion in 2007-08. He now says it would be bigger. And he's provided the chart that shows the projection for the annual operating deficits for several years going forward. The numbers:
2005-06 $2.6 billion
2006-07 $6.4 billion
2007-08 $6.6 billion
2008-09 $9.7 billion
2009-10 $8.6 billion

And this in good economic times. Wow.