Schwarzenegger is good on this....now if he can get his head out of his ass on "climate change"

Good review by Gov Arnold on the real problem with the deficit in CA. But just like with the federal programs (Social Security, Medicare and Medicaid) few are willing tackle it.

Arnold Schwarzenegger: Public Pensions and Our Fiscal Future - WSJ.com

Recently some critics have accused me of
bullying state employees. Headlines in California papers this month have been
screaming "Gov assails state workers" and "Schwarzenegger threatens state
workers."

I'm doing no such thing. State employees are hard-working and
valuable contributors to our society. But here's the plain truth: California
simply cannot solve its budgetary problems without addressing
government-employee compensation and benefits.

. ..As former Speaker of the State Assembly and San Francisco Mayor Willie Brown pointed out earlier this year in the San Francisco Chronicle, roughly 80 cents of every government dollar in California goes to employee compensation and benefits. Those costs have been rising fast. Spending on California's state employees over the past decade rose at nearly three times the rate our revenues grew, crowding out programs of great importance to our citizens. Neglected priorities include higher education,
environmental protection, parks and recreation, and more.

Much bigger increases in employee costs are on the horizon. Thanks to huge unfunded pension and retirement health-care promises granted by past governments, and also to
deceptive pension-fund accounting that understated liabilities and overstated  future investment returns, California is now saddled with $550 billion of retirement debt.

The cost of servicing that debt has grown at a rate of more than 15% annually over the last decade. This year, retirement benefits—more than $6 billion—will exceed what the state is spending on higher education. Next year, retirement costs will rise another 15%. In fact, they are destined to grow so much faster than state revenues that they threaten to suck up the money for every other program in the state budget. (See the nearby chart.)

I've held a stricter line on government employment and salary increases than any
governor in the modern era (overall year-to-year spending has increased just
1.4% on my watch). Nevertheless, employee costs will keep marching upwards
because of pension promises, and they will never stop doing so until we get
reform.

At the same time that government-employee costs have been climbing, the private-sector workers whose taxes pay for them have been hurting. Since 2007, one million private jobs have been lost in California. Median incomes of workers in the state's private sector have stagnated for more than a decade. To make matters worse, the retirement accounts of those workers in California have declined. The average 401(k) is down nationally nearly 20% since 2007. Meanwhile, the defined benefit retirement plans of government
employees—for which private-sector workers are on the hook—have risen in value.

...But what will they do next year when those compensation costs grow 15% more? And the year after that when they've risen again? And 10 years from now, when retirement costs have reached nearly $30 billion per year? That's where government-employee retirement costs are headed even with the pension reforms I'm demanding. Imagine where they're headed without reform.

My view is different. We must not raise taxes or borrow money to cover up
fundamental problems.

Much needs to be done. The Assembly needs toreverse the massive and retroactive increase in pension formulas it enacted 11years ago. It also needs to prohibit "spiking"—giving someone a big raise inhis last year of work so his pension is boosted. Government employees must be required to increase their contributions to pensions. Public pension funds must make truthful financial disclosures to the public as to the size of their
liabilities, and they must use reasonable projected rates of returns on their
investments. The legislature could pass those reforms in five minutes, the same
amount of time it took them to pass that massive pension boost 11 years ago that
adds additional costs every single day they refuse to act.

And after they've finished passing those reforms, they could take another five minutes to
pass legislation terminating the annuity give-away they passed in 2003 and
ending the immoral practice of pension fund board members accepting gifts or
even campaign contributions from lobbyists, salesmen, unions and other special
interests.

Politicians love big pensions. It's a way to buy off the unions and the politicians doesnt' have to pay for it. It's paid for by future generations. The problem is the promises made in the 60s and 70s on the state level are coming due...and the buck can't be passed anymore.