I remember hearing from someone that California, as it's one entity has the 7th largest economy in the world. Unfortunately, unlike most large economies, we have to balance our budgets every year
As for how to solve our problems, I'd say bring back the car tax, change the req for budget changes from 66% vote to 50%. Having a minority not only impede, but totally upend the democratic process is really becoming a problem now. Elect reps that will at least make an attempt at biparitsanship.
A few things that would most likely help.
Being a student at one of the more liberal and protest-ey UCs, I tend to hear this kind of topic come a lot. Sadly, I don't see a lot of change coming in the forseeable future. These problems we have have been building up for decades now. It's just like with forest fires, if you keep putting out every fire that breaks out, eventually all the preserved underbrush is going to contribute to a big one that can't be controlled.
Oh well, Newsom '10!
EDIT: It's interesting that you don't have the car tax as an option. Among educators and students it seems to be very popular, mainly because they hope the revenues will allow an expansion of funding for public education, and a reduction or even abolition of "tuition" costs (remember UCs are mandated to be tuition free) at the public universities. The issue is getting very hot in the light of recent employee/teacher layoffs, furloughs, and a proposed 30% increase in student fees (tuition, but they aren't allowed to call it that).
Thank you Former Governor Reagan, thanks for privatizing public institutions.