State constitution categorically states that no deficit spending is permitted, yet they've done it anyway.
California has been the first state into recession and the last state out of recession since I've been voting in the mid 1970's. What the geniuses in the state house have done over the last 3-4 years is spend about 120% of all the NEW revenue being generated from the current boom, guaranteeing that there'll be a huge deficit during the next business recession. Then they're floating huge "infrastructure bonds", of which only about 25% will actually go to infrastructure. The balance just pays off today's deficit-based budget.
There has to be a crash. Unlike with uncle Sam, California cannot print its own money (though the new bonds come pretty close) and "inflate" it's way out from under it's debt.
Californians are truly screwed within about 3 years. The state will either default on its debt, or implement draconian taxes and spending cuts. It'll be interesting to see if the next Congress and President (both, likely to be Democrat held) bail out California, or let the Democrats running the show suffer. My guess the Fed's bail out California (similar to New York), so for all you non-Californian's who laugh at our plight, just remember that one way or another, you're going to pay for the Dem legislature and Arnie's spending spree in California.
SFS
My wife and I sold some property with a modest capital gain. The State of Kalifornia required that a percentage of the sales price, not the estimated gain, be withheld from the proceeds at closing. As a result, we will be getting back about fifteen grand.
In coming years, the cooling of the real estate market will quickly cause the net proceeds from this scam to drop to virtually nothing, creating yet another source of annual deficit.