Gov. Gray Davis on Tuesday signed a package of budget cuts, fee hikes and fund transfers that reduces the state's deficit for the current year by about $3.3 billion. But that move addresses just a fraction of the state's overall budget problem, which combines a deficit in the current year with a projected shortfall in the coming year for an estimated $35-billion hole.
Next up: Lawmakers in both houses of the Legislature will consider a proposal to capture $2.5 billion by financing state employee retirement contributions through bonds.
Finance Director Steve Peace also is expected to let the "trigger" activate in the 1998 car tax law that forces the tax up when there is not enough money in the state budget to fund the rebates drivers have been getting since the law was passed. And the Assembly is scheduled to hold hearings this month on proposals for balancing next year's budget.