The real problem the state faces is that revenues are short of last year’s total due to the expiration of the temporary tax increases. The drop for the first half of the year is over $4 billion relative to the same time period this year. But, of course, the tax expirations were known when the estimates were made. So that drop is not a surprise - but it is a problem.
The actual report of the state controller is at http://sco.ca.gov/Files-ARD/CASH/fy1112_dec.pdf
There are other things to be scared of: