Step 2: Assume huge federal bailout.
Step 3: Sell off state assets to plug this year's budget, and don't worry about the fact that you'll increase future deficits by having to lease back those same assets.
Problem solved! I don't know why that took so long.
I'm not making this up.
To make up the shortfall, the agreement counts on an improving economy and the federal government to provide more money than previously projected.
Senate President Pro Tem Darrell Steinberg, D-Sacramento, said last week that the leaders turned to some "creative" bookkeeping after Republicans refused to raise taxes and Democrats rejected deeper budget cuts.
The pact he and the others reached Friday night assumes about $5 billion will come from the federal government, up from the $3.4 billion the governor had projected, said multiple sources close to the negotiations. It uses the Legislative Analyst's Office optimistic forecast of an additional $1.4 billion flowing to the state from higher-than-projected revenues. And it counts on as much as $1.2 billion from selling 11 state properties, then leasing them back.