Well, this will help a bit:

Some rare good news for California’s budget woes came from Washington today – in the form of a promise of federal dollars from U.S. Health and Human Services Secretary Kathleen Sebelius. Sebelius announced that states, including California, will have to pay the federal government less for prescription drug coverage for residents eligible for both Medicare and Medicaid. The result is a shrinking of $675 million from California’s estimated $20-billion budget shortfall through June 2011.  (LA Times)

It’s still not enough to really present a lot of answers, but it’s an important chunk out of the deficit.  But hey, Meg Whitman says $10 mil here, $20 mil there, right?