I agree with most of what Stan and Pete have already posted. Paul Krugman nicely pointed out the obvious: " ... California has immense human and financial resources. It should not be in fiscal crisis ..." California's current predicament has been caused by its self-imposed political dysfunction.
There are plenty of resources in California to tax to pay for the state's budget. If the California legislature is unable to raise the needed revenue or cut the excess spending beyond the revenue it can raise, then the governor may have to go hat in hand to Washington. What should he find when he gets there? A firm response that a precondition for any special assistance in the short term is a set of fiscal changes that ensure that there will be more than enough money in the state's general fund to pay back the money, at a high rate of interest, over the long term.
It has been my view since the beginning of the bailout frenzy over a year ago that if the federal government is going to get involved, it ought to do so as a vulture investor. A vulture could eat well in California.