Why does California seem to struggle with its budget every year? Is state spending really out of line, as Republicans suggest, or are Democrats right when they say we need more revenue? Dan Walters walks us through some key mileposts on the road to this year's state budget stalemate, and offers some key statistics to help you get to the bottom of the debate.

GENERAL FUND SPENDING

2002-03: $77.5 billion

2007-08: $103.5 billion

Increase over those five years: $26 billion (+33 percent)

Increase tied to inflation: $13.2 billion (+17 percent)

Increase tied to population growth: $5.4 billion (+7 percent)

Spending growth beyond inflation and population growth over those five years: $7.4 billion (+9 percent)

IS STATE SPENDING OUT OF CONTROL?

One way of measuring state spending is by looking at its relationship to the overall economy. In the last five years, general fund spending has increased from 6.75 percent of Californians' personal income to 6.82 percent.

Fiscal year general fund spending* as a percentage of personal income:

1981-82: $21.7 billion (6.78%)

1985-86: $28.8 billion (6.43%)

1990-91: $40.3 billion (6.21%)

1995-96: $45.4 billion (5.93%)

2000-01: $78.1 billion (7.07%)

2002-03: $77.5 billion (6.75%)

2005-06: $91.6 billion (6.08%)

2007-08: $103.5 billion (6.82%)

*Not adjusted for inflation.

BIGGEST CONTRIBUTORS TO SPENDING GROWTH

PRISONS: Spending jumped nearly 75 percent, from $5.8 billion a year to $10.1 billion, thanks not only to an 11,000-inmate increase in prison populations but sharply higher salaries for guards and other prison workers.

VEHICLE LICENSE FEES: Gov. Arnold Schwarzenegger cut the car tax but promised to pay local governments who use the money from the state treasury anyway. State payments to local governments rose about $3 billion over the period, to $6.1 billion per year, as more cars hit the road and their value increased.

EDUCATION: The biggest dollar increase has been in state support of K-12 education, from $28.8 billion in 2002-03 to $42.1 billion in 2007-08, but $6.1 billion of that increase was from shifting the method of reimbursing local governments for losses of vehicle license fee revenues. The real increase for schools was $7.2 billion, or 25 percent. Inflation during the period was 17 percent, and school enrollment was relatively flat, so inflation-adjusted per-pupil spending by the state did rise by approximately 8 percent.

OTHER FACTORS: Spending on Medi-Cal also outstripped population growth and inflation due to increased health care costs. Increases in most other major state expenditures were in line with inflation and population growth.

30 YEARS OF BUDGET PROBLEM MILEPOSTS

1978: Before 1978, fashioning a state budget each year was a fairly routine task. But passage of Proposition 13 in June 1978, which slashed local property taxes, began a radical budgeting makeover. General fund spending jumped as the state assumed greater responsibility for schools and local services.

1979-1990: After Proposition 13 passed in 1978, its co-author, Paul Gann, sponsored a 1979 measure to limit government spending increases to inflation and population growth, with excess revenues rebated to taxpayers. The measure limited state spending increases in the 1980s, and mandated one rebate, but was loosened in 1990 as part of deal between Republican Gov. George Deukmejian and Democratic legislators on a boost in gas taxes. The Gann Limit has never been a factor in the state budget since, but Republicans are now demanding that it be revived.

1988: The budget continued to balloon as the state assumed more burdens previously borne by property taxes. In 1988, a coalition led by the California Teachers Association persuaded voters to pass Proposition 98, aimed at giving schools a guaranteed portion - 40 percent or more - of the state's revenues.

1991: The end of the Cold War and the rapid drop in military spending plunged the state into the worst recession in a half-century. General fund spending was virtually frozen at about $40 billion for several years as GOP Gov. Pete Wilson battled with Democrats and the CTA. They balanced the budget by raising income and sales taxes, cutting some state spending and forcing local governments to shoulder some of the impact. A temporary sales tax increase was later made permanent, with approval of voters, to make up some of the losses to local governments.