There is an easy answer: Don't cave in like last year!
With Gerrymandered safe districts for virtually all Republicans and Democrats, no legislators risk losing their re-elections by hanging firm. The only risk for Republicans is that Davis and the media will successfully blame them for failing to pass a budget and somehow exploit that to defeat Simon. But it's at least as likely that Republicans can use the budget impasse to highlight Davis' policy screw-ups which created the fiasco in the first place.
There have never been better political circumstances for Republicans to insist on spending cuts and no tax increases here in California. Republicans have the intellectual leadership (State Senator Tom McClintock in particular) to forcefully and eloquently make their case. And Republicans have enormous leverage to pressure Dems into backing down, given the recent court decision that state workers can at most be paid minimum wages in the absence of an approved budget.
If Republicans can't make at stand under these unusually favorable conditions, then they are truly worthless.
We also have the press completely against us, and I don't know if our message -- which is a good one -- will even see the light of day. Look why the media is doing to Bill Simon! They barely report on his activities and he's running for governor in the largest state in the country!