San Francisco Business Times, July 13-19, 2007

Over a year ago legislature passed a budget with a deficit of $4 billion. The projected deficit for this year is $3 billion, but the shrinking trend is over and the financial future of the Golden State looks grim.

After minor attempts to produce a balanced budget this year, the Legislative Analyst's Office projects, based on the May revised budget, a $3 billion deficit for fiscal year 2007-'08 and at least $5 billion for 2008-'09.

Gov. Schwarzenegger's short-term solutions - shifting funds around and privatizing a few programs - will not suffice. The problem is that government expenditures far outweigh revenues.

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