The Golden State is made of lead: Pollyannas say we'll all be going back to Cali. I don't think so.

• Author: Cavanaugh, Tim
• Position: California's budget problems

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"WE'VE BEEN living in Fantasyland," incoming California Gov. Jerry Brown announced in a December forum on the state's dire budget situation. "It is much worse than I thought. I'm shocked."

Amid lengthy budget crises and nationwide snickering, you might not think anybody in the Golden State could still be shielded from harsh reality. After all, spending for the current fiscal year is a mere $86.6 billion, only $300 million more than in the previous year-an increase former Gov. Arnold Schwarzenegger described as "essentially flat."

State spending is down almost $20 billion from its 2008 level, but that's still not nearly enough to get Sacramento's fiscal house in order. In December, less than two months after signing a putatively balanced budget that had initially come in with a $19 billion deficit, lame duck Schwarzenegger--supported by Gov.-elect Brown--convened an emergency session of the legislature to close an additional $6 billion gap that became apparent after the budget was enacted. Evidence for California's looming insolvency is all around: a state of fiscal emergency in Stockton, a potential municipal bankruptcy in Los Angeles, a government bond rating that is the worst among the 50 states, unfunded pension obligations that could run as high as $500 billion over the next decade.

Since the 1990s, California has gone from being a net gainer to a net loser in interstate migration. In its latest census results, its population growth was nearly flat relative to the nation as a whole; for only the second time in history the state will gain no congressional seats.

So who is living in Fantasyland?

Say hello to Democratic Assemblyman Gil Cedillo, a career politician based in Los Angeles, who returned to the Assembly this year after losing a race for the U.S. House and getting termed out of his state Senate seat. The same month that Brown was lifting the curtain on Fantasyland, Cedillo filed a claim with the California Victim Compensation and Government Claims Board. The state's independent salary-setting commission for public employees, Cedillo complained, had unfairly cut his pay as a state senator in 2009--when the state's unemployment rate hit a then-record 12.2 percent (it has since increased to 12.4) and the budget deficit was nearly $60 billion. If Cedillo doesn't get his back pay (more than $20,000, plus various benefits), he is threatening to file a lawsuit.

Also following the Lucy van Pelt principle that...