Let’s turn Calitics into Court TV for a little while, shall we?  In addition to Debra Bowen suing ES&S, Jerry Brown has made the strongest move to date against companies who profited from toxic toys made in China, suing Mattel, Toys “R” Us and about 20 other companies for “knowingly” selling the products with illegal amounts of lead.

The suit, filed in Alameda County Superior Court, alleges the companies knowingly exposed children to lead and failed to provide warning of the risk, which is required under the Safe Drinking Water and Toxic Enforcement Act of 1986, known as Proposition 65.

If the suit is successful, the companies could pay a $2,500 fine for each violation, according to the complaint […]

The suit, which was joined by the Los Angeles city attorney’s office, also named as defendants Wal-Mart, Target, Sears, KB Toys, Costco Wholesale and others.

That could add up in a hurry, when you consider the millions of lead-filled toys in California that have been sold.

Meanwhile, the state isn’t the only with prosecuting attorneys, as the auto industry is challenging the state’s global warming law in a Fresno District Court.

Lawyers for car manufacturers, dealers and trade associations said California’s 2002 law, the model for statutes in 11 other states, amounted to a requirement for higher gas mileage, a subject that only the federal government can regulate.

Although federal law allows California to take a lead role in reducing air pollution, Congress never “intended a single state to have such sweeping authority to unilaterally set national fuel economy policy … and profoundly affect a vital national industry,” said Raymond Ludwiszewski, lawyer for a trade group of international automakers.

But U.S. District Judge Anthony Ishii suggested that the industry’s argument had been undercut by a U.S. Supreme Court ruling in April upholding the federal government’s authority to limit emissions of greenhouse gases.

The district judge will follow precedent here; this lawsuit is frivolous.  But the point is to buy time.  Meanwhile, the EPA is still foot-dragging on granting a waiver that would put the 2002 tailpipe emissions law into effect, and the state has sued the federal government over that.

The nation actually had a good employment month in October.  The economy added 166,000 jobs, mainly in the professional and business services, health care, and leisure and hospitality sectors, and even construction was largely unchanged.

On the other hand, California lost 15,800 jobs, and year-over-year unemployment is up a full point to 5.6% (and that of course doesn’t include those who have stopped looking for work).  That’s also a full point over the national average.  The apologists that call themselves economists in this article are trying to spin the numbers but it won’t wash.

October’s decline in employment, the biggest since the loss of 14,000 jobs in July, confirms that the state’s economy is slowing, said Stephen Levy, who directs the Center for the Continuing Study of the California Economy in Palo Alto.

But “this is a slowdown that the nation is participating in,” Levy said. (Then why did the US add 166,000 jobs in the same month? -ed.) […]

Levy cautioned against making “a big deal” of the overall job loss figures.

“None of this is like when we lost our aerospace industry — that was permanent — or when the Internet bubble burst,” he said.

The current job losses do not signify any loss of strength in the state’s key economic sectors, he said. “It’s not like our economy is threatened from this.”

Really?  You mean the construction sector isn’t losing strength due to the housing meltdown?  And that isn’t driving economic trouble in all other sectors, as the end of refinancing and redecorating new homes depresses consumer spending?

Ever hear of trash-outs?

“An old wooden house along Genevieve Street in San Bernardino was the scene recently of a trash pickup for tenants who lost their home to a bank foreclosure.”

“On Thursday morning, the driveway was piled up with appliances, furniture and clothes that were littered everywhere – a telltale sign of a family that recently lived there. An old gas stove with a skillet full of dust was found. In the back yard, there were mattresses, a microwave, two mangled couches and a bulky refrigerator.”

“Foreclosed homes all over the Inland Empire are turning into what Lisa Carvalho calls ‘trash-outs’ – wooden and stucco carcasses with piles of junk left behind by former tenants.”

“The High Desert offers even more interesting tales. The area is full of tract homes in subdivisions that have stacks of furniture piled inside every room, she said.”

“‘These typically look like they’re occupied, but they’re not trashed,’ she said about these homes. ‘(The owners) just walk away and wash their hands of it.'”

Distressed properties (which are usually foreclosures or short sales) made up one out of every five homes listed for sale in Orange County last week.  And it’s hard to even say who’s in worse shape, homeowners, realtors, or financial institutions stuck with mortgages that will be defaulted without delay.

This is a crisis, and economists who keep their heads in the sand aren’t serving whoever it is they’re supposed to serve.  The legislation that would have at least helped to address this was blocked by Senate Republicans last week.  Where California is able to go in the next decade relies on stabilizing this housing situation.

Greetings from the almost-impossible-to-enter-by-car Wadsworth Theater for a Presidential forum on energy and environmental issues, featuring John Edwards, Hillary Clinton and Dennis Kucinich.  All the campaigns had good support out in front of the venue.  I’m here with Hekebolos, thereisnospoon from Daily Kos, RJ Eskow from the Huffington Post, Todd Beeton of MyDD and a couple others in Blogger’s Row.  Each candidate will get a half-hour to answer questions on their energy plans.  There’s a live webcast starting at 2:00pm PT at the enviro website Grist.

There will be press availability afterwards, possibly with Edwards. (UPDATE: Edwards is confirmed for the press tent, along with Hillary surrogate Carol Browner, the former head of the EPA.)

UPDATE (1:26pm) Just got a pamphlet from the NRDC entitled “Solving Global Warming: It Can Be Done.”  Interesting, considering that the latest IPCC report yesterday basically said it can’t be done and it’s time to adapt to a warmer future.  Wonder if that will come up today.

UPDATE (1:30pm) The event kicks off with welcoming remarks from Los Angeles Mayor Antonio Villaraigosa.  Yesterday the LA Planning Commission approved a very ambitious green building plan, which would have a dramatic impact on energy use.

Under the L.A. rules, new buildings with more than 50 units or 50,000 square feet of floor area would be required to meet national standards established by the U.S. Green Building Council, a Washington-based nonprofit organization that is working with cities across the country. The measure is expected to come before the City Council early next year.

The standards — known as Leadership in Energy and Environmental Design, or LEED — would reduce the amount of energy used in large developments to well below what is required by California’s building code, the strictest in the nation.

Green building is a major part of mitigating the effects of global warming and reducing greenhouse gas emissions.

UPDATE (1:42pm) Dante is liveblogging at Daily Kos.

Future updates on the flip:

UPDATE (2:02pm) Incidentally, every candidate from both parties was invited to attend this event.  Shows you the commitment on the Republican side to the environment.  Also, our friend Steve Maviglio and his boss Fabian Nuñez decided to attack Obama for not atending (as per a stated policy that he would only do the DNC-sponsored debates in the future).  Boy, if they’d only put that energy to attacking Republicans instead of other Democrats…

UPDATE (2:33pm) Bit of a late start, they’ll be getting going in about 15 minutes.

UPDATE (2:42pm) OK, we’re getting it going now.  Steve Kirwood from Living On Earth on PRI is speaking.  He’s talking about Bangladesh’s Katrina, the cyclone that killed over 1,500 people, and the IPCC report released today.  This should be a very substantive forum on the issues.  We’re maxing out the ability of the oceans and the forests to handle the carbon dioxide levels.  This is a crucial issue for our future.  Kirwood said, “We invited all of the candidates here today, and we are pleased to have 3.  And we expect to see more later.”

UPDATE (2:45pm) Dave Roberts from Grist is speaking now.  Grist is really a go-to site for news and information about the environment.  I try to check it out as much as possible.  Their interview with Ron Paul is priceless.  His position of climate change is basically “people can control the air above their house!”

UPDATE (2:47pm) Roberts gets a huge applause line talking about the “failure of the political media” in talking about this issue.  “Tim Russert has had candidates on MTP 16 times and asked 300 questions, the word climate change has not passed his lips.”

UPDATE (2:50pm) Susan Smart from the California League of Conservation Voters touted California’s efforts to fight global warming, and now the chair of the LCV, Gene Karpinski, is speaking.  The LCV’s goal is to make global warming a priority in the Presidential campaign.  They might want to give Tim Russert a call.

UPDATE (2:51pm) More speakers.  This is a major step back by Gordon Brown in Britain, where he’s cutting the climate change department in his government by almost $600 million dollars.  England was the bulwark worldwide for real change on global warming.

UPDATE (2:56pm) A bunch of other speakers went, and now Laurie David (producer on An Inconvenient Truth, environmental activist) is about to speak.  She’ll be introducing Antonio Villaraigosa.  David is relating a discussion with James Hansen, who said “we are already guaranteed 2 degrees of warming, and Lord help us if we go beyond that.”  Her point is that if scientists, who are extremely cautious, are willing to go that far and talk in such alarmist terms, it’s time to be worried.  “Solving global warming can be America’s finest moment; continuing to ignore it can be our worst.”  She’s now introducing Villaraigosa.  I expect him to touch on the green building proposal passed on Thursday.

UPDATE (3:00pm) Will Villaraigosa disclose that he’s supporting Hillary?  So far he’s praising Laurie David.  He is evenhanded in his praise of the candidates who chose to attend.  “I know the press is focused on Iowa and New Hampshire, but these candidates came West because they know we can’t kick these problems down the road.”  Talks about the wildfires, the Bay Area oil spill, and our SoCal drought problem.  Mentions how the Bush Administration slashed Julie Gerberding’s testimony in the Senate Environment Committee on the public health problem with a warming planet.  “It’s time we had somebody in the White House who actually believes in science.”

UPDATE (3:04pm) I’m glad that they’re giving the candidates a half-hour.  Climate change, as Steve Kirwood just said, is a difficult issue that doesn’t play as a soundbite.  This should really be the model for these kinds of forums, not the Wolf Blitzer-fest we saw on display this week.

UPDATE (3:07pm) The panelists are Dave Roberts from Grist, Mary Nichols from the California Air Resources Board, and Steve Kirwood.  Kucinich is being introduced right now.

UPDATE (3:09pm) Kucinich has taken the stage.  “It’s great to be at a Presidential forum that’s not sponsored by the coal industry, as the last one was.”  Good line.

UPDATE (3:10pm) This starts off as a pretty head-in-the-clouds speech by Kucinich.  I like that he’s talking about using his own life as a model for sustainable living (his 1,600-foot home, old Ford Focus that gets 30mpg, etc).  Starts with abolishing nuclear weapons (?) and biological and chemical weapons and the landmines treaty.  I guess he’s moving into cooperating with international conventions.

UPDATE (3:13pm) This is a “call to conscience” by Kucinich, talking about our interconnectedness and how global warring intersects with global warming.  Now we’re getting specifics.  The “Works Green Administration” would involve every government agency. In transportation, that means mass transit.  In housing, incentives for green building and homes that use natural lighting.  In the Dept. of Energy, disincentives for oil, coal and nuclear, incentives for wind and solar microtechnologies.  This is about government as an engine of sustainability.  In health, “imagine a President who stands for a not-for-profit health care system, where we meet the challenge of obesity, which is connected to the kind of diet people have.”  In education, educating at an early age.  In commerce, mandating environmental standards by cancelling NAFTA and the WTO.  in Interior, removing the incentives for extracting our natural resources.  And on and on.  This started slow, but is a really good platform.

UPDATE (3:18pm) Kucinich “I would use NASA’s brainpower to move America toward a green economy.”  An Apollo program for energy is sorely needed.  “I think there’s an enormous amount of wealth out there that is waiting to be harnessed if we would only go green.”

UPDATE (3:20pm) We move to the question stage.  Kirwood asks “how would you do this,” and Kucinich answers that he would go directly to the people and get them behind me to challenge the special interests.  “This government has enormous potential as the government of the people.”

UPDATE (3:22pm) Mary Nichols is basically asking about the politics of it.  How do you reverse the dynamic in the Senate?  There’s tremendous resistance at the federal level.  Kucinich is giving kind of the same answer.  He thinks that a President who isn’t tied to these interest groups is the answer.  That’s really not sufficient.  A grassroots movement to reclaim the country is fine, but the legislative process still exists.  “I will go over the heads of Congress to the people.”  How?  It’s not much of an answer.

UPDATE (3:26pm) This is a better answer.  The global warming fight can be an economic engine for this country.  He explains that you can protect the coal miners at the level of pension and health care while transitioning to a new economy.  There is a need to step outside the status quo.

UPDATE (3:32pm) “The only thing that limits us is our thinking.” -Dennis Kucinich.  The speech ends up veering into some other areas, but at root that’s his approach.  I like that Steve Kirwood is bringing it back to the practical implementation.  Kucinich is being stubborn about this, and good for him, in a way, but practicalities need to be addressed.

UPDATE (3:34pm) “Clean coal is an oxymoron.”  Good to hear a Presidential candidate say that.  And it’s a nice turn to say that the price of lost jobs in stopping coal plants, for example, is miniscule compared to the price we’d pay from catastrophic global warming.  Dennis is hitting his stride here.

UPDATE (3:38pm) Kucinich on the moral issue at work here.  The effects of climate change are starting to impact people’s lives.  “Resource wars” like Iraq and Iran.  Peace=sustainability.  And all of our trade agreements must include worker’s rights, human rights, and environmental quality principles.  Kucinich often offers everybody a pony, but the underpinnings are sound.  “You are the ones who can change it all.  This candidacy offers the profoundest change.”

UPDATE (3:42pm) A smattering of boos as Hillary Clinton is introduced.  That’s not really right.

UPDATE (3:43pm) Hillary came armed with a speech, and her people provided the press with her detailed energy and climate plan.  It’s pretty solid, actually, she waited until the end to deliver it, but it provides some great pieces, including a 100% auction for pollution permits, and a goal of 80% reductions in greenhouse gases by 2050.

UPDATE (3:45pm) A sober yet detailed speech here.  Clinton slams “a President who has dodged, denied and dissembled.”  She says that we are more dependent on foreign oil than we were on 9/11.  This is pretty boilerplate, actually.  Clinton says she understands how hard this will be, but she wants to actually talk about implementation.  Her goals, beyond reducing greenhouse gases by 80%, are cutting foreign oil imports by 2/3 by 2030, and creating an efficient green economy which would increase 5 million jobs.

UPDATE (3:49pm) Clinton believes that the case has not yet been made on global warming.  She’s really touting California’s energy efficiency (our usage has remained stagnant over the last 30 years).  She’s asking for everyone to pitch in.  Now she’s discussing the cap and trade program she’s proposed.  She’s calling for a $50 billion Strategic Energy Fund, taking the money from oil company subsidies.  All future federal buildings would be carbon neutral.  Renewable energy by 2025.  Green-collar jobs.  The US Treasury will issue energy independence bonds.

UPDATE (3:52pm) Everyone has put forth a good plan on global warming.  Now Clinton is segue-ing into operationalizing it.  She wants to found a National Energy Council so all agencies can talk to one another.  Wants an E8 modeled on the G8 to get the world’s largest emitters talking.  This is a good framework that I would hope any Democratic candidate would pick up.

UPDATE (3:55pm) Kirwood asked pretty much the same question as he did Kucinich.  Everyone says they’ll tackle climate change.  The question is how.  Clinton pushes back that George W. Bush intended to do anything about global warming.  The difference is that people’s awareness is greater.  But didn’t she just say that when she talks about global warming on the trail, it falls flat?

UPDATE (3:58pm) Clinton mentions that we’re falling behind in global leadership on this issue.  That’s true; it’s shameful that we created solar energy and yet we’re not the global leader in it.  Now Clinton’s talking about the movement in the federal energy bill.  We’ve never had a renewable energy portfolio and increased CAFE standards before.  She’d do as much as possible in the executive seat, but would work with Congress and she thinks it’s realizable.

UPDATE (4:01pm) “I would meet every 3 months with the leaders of the most emitting countries.” -Hillary Clinton.

UPDATE (4:03pm) I’m surprised at the lack of detail in this forum.  It’s all about politics and not policy.  Very meta about how “the forum is significant,” but nobody’s digging in to the actual details about how to best go about this.

UPDATE (4:04pm) There was some sort of disturbance inside the hall, leading Clinton to snap “Were you invited to speak here today?”  As Vernon Lee sitting next to me remarked, this is a “Don’t tase me, bro” waiting to happen.

UPDATE (4:06pm) Hillary launches into a stirring defense of incremental change.  This is really odd.  What happened to the global warming forum?  This whole “we have to stand united from the attacks from the other side” is too candidate-as-pundit for my taste.  How about leading and uniting instead of talking about leading and uniting?

UPDATE (4:08pm) Finally, a policy question.  Dave Roberts is asking about Lieberman-Warner, which is a bill that has little support among environmentalists as an insufficient step.  Clinton says “the bill needs a lot of improvement.  It’s not a bill that I would write or that Sen. Boxer would write.  I’m a cosponsor of the Sanders-Boxer bill.  Boxer is trying to improve the bill and create a context where that bill can lay down a marker.  George Bush would likely veto this bill… what is the strongest bill we can get out of committee right now?  I can’t tell you what the bill is going to be, so I don’t know how to vote.  I don’t like the cap and trade without auction and the payouts to polluters.  On the other hand, we have never gotten this far.  If it can get stronger, Boxer thinks it’s the right thing to do.  It really comes down to a pragmatic assessment.  Is a bipartisan bill more important?”  There you have it, there’s a Clinton Presidency right there.

UPDATE (4:13pm) Clinton’s basically hiding behind Boxer on this thing.  She’s lashing out at one environmental group running ads against her in Iowa.  There’s a touch of “let’s unite and line up behind me” to this thing.

UPDATE (4:15pm) Question about foreign policy and climate change.  Clinton’s talking about China and India in this context, stressing the power of dialogue and showing countries that we’re not trying to slow their development but jump-start it.  The power of listening and not just talking.  Namechecks Gore and the Nobel Peace Prize, he could be used as a spokesperson (vaguely mentions a “position in our government”).

UPDATE (4:19pm) Edwards is being introduced.

UPDATE (4:20pm) Edwards: We need a President who won’t just deliver a message on climate change to a friendly audience.  I believe that our generation needs to face hard truths.  Adds his theme of “the system is broken” to global warming.  I see politicians who are too afraid of rocking the boat to challenge the status quo.  Oil and gas companies block progress by spending millions.  Mentions the IPCC report and the need for immediate action.  Two weeks from now we’ll be sending someone to the climate change conference in Bali with no ideas “it’s an embarrassment.”  We need to cap greenhouse gas pollution (similar stats to Clinton, he did come out with it earlier, but as I said, everyone’s on board in the Democratic Party with good plans).  I believe carbon caps will have an impact on fossil fuels.  The truth is that the big change we need will not be easy.  We need a President that will challenge them to be a part of the solution.

UPDATE (4:26pm) I’m glad that all three candidates have picked up the theme that we are missing out on an economic goldmine if we don’t go green.  Edwards devoted a good bit of his speech to it.  Why should there be a headline “Foreign Firms Build Wind Farms in US”?  Pushing the green jobs and entrepreneurship angle is a political winner.  So is using the term “carbon welfare,” which Edwards just did.

UPDATE (4:28pm) Edwards uses his signature “It’s time for the American people to be asked to be patriotic about something other than war.”  He adds to that by citing the examples of our ancestors and the moral tests they faced.  This has become more of a stump speech now.  But there was some solid stuff in there.

UPDATE (4:32pm) Moving into the Q&A segment.  Let me guess: Steve Kirwood is going to ask “How?”…… Bingo!

UPDATE (4:34pm) Edwards is saying that America is hungering to do something.  After Katrina, the government was a mess, but the people took action.  We need a President to echo the JFK speech “Ask not what your country can do for you.”  He jibes at Clinton subtly by not that a leader shouldn’t be driven by polls.  The government has become corrupt, and we need to be honest about that.  This is pretty much the theme that he’s going to live or die with.  That was an extremely strong bit of rhetoric right there, talking about how we can take on the powerful interests that are committed to blocking change.

UPDATE (4:38pm) Another process question.  “How are you going to build change in areas most impacted by the coal economy.”  America should not be building more coal-fired power plants.  But we should use some of the cap and trade money to revitalize those communities.  As we make this transition to a green economy, we can work hard to generate new jobs where people are suffering.  This is true, because the jobs can be held pretty much anywhere.

UPDATE (4:41pm) Question on climate change impacting poor and undeveloped nations.  How can we help those countries adversely affected?  Edwards: We’re doing nowhere close to what we need to do.  We have to be willing to invest in a way we’re not investing today.  Drought-resistant irrigation techniques, walls, drought-resistant crops.  The poorest countries are ALWAYS adversely affected.  We need to be a moral leader on all the big issues, not just global warming.  Edwards spins off into international efforts on education, disease, HIV/AIDS, clean drinking water and sanitation, economic development, etc.  The only way America will be a global leader is that the world needs to see us as a force for good again.

UPDATE (4:47pm) There’s a bit more on moral leadership, starting with ending the war, Guantanamo, rendition, secret prisons, warrantless wiretapping, torture, etc.

UPDATE (4:48pm) This debate could have been by three CNN commentators.  Wow.  The lack of specifics in the questioning is pretty astounding.  The candidates are actually doing a pretty good job putting it back on the issues.

UPDATE (4:52pm) “I believe in the progressive agenda.” -John Edwards.  We won in November 2006 because we wanted change.  If we have a Presidential candidate that’s all about big, transformative change, and we’re talking about weeding out the corruption in DC, then we can win big.  This is an electability argument.  An Edwards candidacy would be a tremendous test case on the progressive agenda.

UPDATE (4:54pm) Edwards reiterates that people in the country don’t have a full sense about the scope of the climate change problem.  It’s really something environmental activists have to come to terms with.  A brief mention on stopping media consolidation led to a cheer in the press room.

UPDATE (5:09pm) OK, I got to ask Robert in Monterey’s question to Sen. Edwards about mass transit and the subway to the sea.  He expressed strong support for mass transit as playing a role in his overall policy, and stressed his efforts in the US Senate for railway transit in the Research Triangle in North Carolina.  We wasn’t familiar with the Subway to the Sea project.  It was a fairly boilerplate answer, but I’m glad I got mass transit on the radar screen.  Thanks Robert!

As long as we’re talking about what we’re all doing this weekend, I will be your intrepid reporter tomorrow, live from the Wadsworth Theater in Los Angeles at the Presidential Forum on Global Warming and Our Energy Future, sponsored by the California League of Conservation Voters, the enviro website Grist and PRI’s “Living On Earth” radio program.  Grist will have a live webcast of the forum tomorrow at 2:00pm PT.  You can find it here.  I’m expecting to liveblog the event at Calitics as well.

Hillary Clinton, John Edwards and Dennis Kucinich are scheduled to attend, and speak for a half-hour on the environmental and energy proposals they would support as President.  The good news is that practically all of our Democratic candidates, even the ones who aren’t attending, have put out strong policies on fighting global warming and expanding renewable energy, from Chris Dodd’s corporate carbon tax to Bill Richardson’s ambitious CAFE standard porposal (50MPG) to Barack Obama’s 100% auction for a cap-and-trade system, where polluters would have to buy their carbon credits and not be given them.  Clinton and Edwards have also put out bold proposals in this arena, and I’m looking forward to hearing more about them tomorrow.

One thing you all can do TODAY is take action on the imminent federal energy bill.  There are three planks that everyone would like to see in it; a federal renewable energy standard that would mandate a healthy percentage of all electricity come from renewables like solar and wind; tax incentives for renewable energy, both for corporations AND for individuals who put solar panels on their house (this would be vital is California is to reach its One Million Solar Roofs Initiative), and a major increase in CAFE standards.  I believe that the first two would be signed by the President; he signed similiar legislation as the governor of Texas, and now Texas has MORE wind power than California.  Environment California is asking people to email Speaker Pelosi today and ask her to stand strong on the federal energy bill.

UPDATE: This ruling by the 9th Circuit Court of Appeals is a positive step, requiring the Bush Administration to force SUVs and light trucks to meet the already-meager federal CAFE standards.  This would close a loophole the automakers have been using for a while.

I didn’t have the time yesterday to mention that the Legislative Analyst’s Office has confirmed what everyone had feared for a while, that California is staring a $10 billion dollar budget deficit in the face and there’s seemingly no political will to address the structural fiscal problems underlying the projected deficit and do something about it.  All of the top legislative leaders had something to say about the LAO report, and I didn’t see a ton of leadership there.  Arnold and the Republicans focused on major budget cuts while making vague and insufficient nods toward “serious discussions” on budget reform.  Speaker Nuñez was pretty vague himself though he held the line on a cut-only approach, and Senator Perata had perhaps the strongest response, though it’s perhaps too focused on the past:

“Since last May, I have talked about California’s flawed and unbalanced fiscal structure. Today’s LAO report is another sobering reminder that quick fixes will not provide a long-term solution to the state’s budget woes.

“I once again call on the Governor and my fellow legislative leaders to begin a serious discussion about how to build a structurally balanced budget.

“There is an ongoing gap between state expenditures and revenues that this Governor helped create by slashing Vehicle License Fees and refusing to balance that loss with revenue from another source. That alone accounts for $6 billion of this problem.

“An honest dialogue about closing the budget gap must include exploring all options.”

But the real strong medicine was delivered by the LAO’s Elizabeth Hill.

In releasing her five-year fiscal outlook Wednesday, Legislative Analyst Elizabeth Hill said lawmakers face tough decisions for the fiscal year that begins July 1.

“All the easy solutions are gone,” she said.

Hill, the state’s top budget analyst, called for immediate cuts to “double up” savings for the current and upcoming fiscal years. She also offered solutions certain to meet political opposition, including raising taxes.

Her projections were worse than previously stated by the Schwarzenegger administration, which pegged the shortfall at $6 billion. Hill said the deficit has increased due to growing government expenses that have outpaced revenues in an economy weakened by the real estate slump.

Realistically, since you can’t deficit spend, it’s going to take a combination of revenues and cuts to balance the budget.  This problem is only likely to get worse.  The median home price in the state dropped $60,000 in a month.  That severely impacts property tax revenue.  And the state lost a Supreme Court case where they were trying to stop a payment of $200 million in interest to the teacher’s pension fund.  But those are just the short-term issues.  The problem is long-term.

Hill said the state’s structural imbalance has been around for years – a challenge state leaders have failed to address.

“We’ve been facing a problem every year since 2001-02,” Hill said. “And when you look out to 2012-13, we still do not have our expenditures and revenues in line.”

The state has confronted bigger fiscal crises before. In 2003-04, lawmakers were facing gaps as big as $38 billion. The state resorted to borrowing, which Hill said is exacerbating the current problem because cash is going to debt payments.

Borrowing at this point is almost immoral.  There’s going to be a need to maybe allow some painful cuts in exchange for long-term fixes in revenue structure.  Next year will be incredibly difficult.