California's problems are not uncommon.

At my previous residence (Montgomery County, Maryland) the county government made the same basic mistakes in its business decisions. They believed the real estate boom was never going to end, and that housing prices would continue to rise at 10% or better each year. Since real estate taxes were based on a 100% valuation assessment (and adjusted every three years to allow for value gain) the county figured that the money faucet was going to be opened more and more each year. So, they made long-term contracts for services, labor, new roads, new buildings, et cetera based on what they thought their future income via taxes would be.

Lo and behold, the real estate market busted. So, the county upped the millage to make up for the reduced property valuations, trying to continue the county money flow. As a result, everyone's property taxes rose to stratospheric levels.

California has a lot of choices, just like any government. As an example, it's contracts for "whatever" should have protections to allow for early termination, as this is a normal governmental practice. Yet, the state seems to expect to have "it's cake, and eat it, too," and stick someone else with the tab.

Then again, that's what Chrysler, Ford, GM and a host of financial institutions have done - with a Congress too lazy to even read the legislation it signs. Now that the prior bailouts have occurred, we can expect the parade of beggars to continue from all sides.