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The following paragraph is from the Pew Center early last year. Note that $140 billion from the stimulus bill was used to prop up State Governments in 2009 and, I believe, in 2010 as well - it is an election year afterall. This move by Obama allowed the states to get by for one more year without making the cuts necessary to balance their budgets. So now it's 2010 and they are still short and needing another hit. This has to end at some point and it is not going to be pretty.

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"How much money will the states get from the stimulus?

More than $200 billion of the $787 billion package will flow through state governments, but only about $140 billion will be available to plug states’ debilitated operating budgets—which fund most programs and services. Much of the boost will come from $87 billion in Medicaid funding and $53.6 billion in a state fiscal stabilization fund to prevent teacher layoffs and other cutbacks in education and other key services. The fund includes $39.7 billion to local school districts and $5 billion to states as bonus grants for meeting key education performance measures; states can apply another $8.8 billion to a wide variety of spending needs, including public safety and school modernization. In addition, the stimulus directs $27.5 billion to highway and bridge projects, $26.6 billion of which is directly apportioned to states—but these fall under capital budgets."

Note that $140 billion from the stimulus bill was used to prop up State Governments in 2009

Bingo! Which is why the "stimulus" was such a profoundly bad idea. All it did was delay the inevitable time when states learn to live within their (our) means. California will die a horrible death one way or the other, but better a horrible end than horrors without end.