CARISSA MARSH/Acorn Newspapers THE COLD, HARD FACTS— Assemblymember Audra Strickland (R-Thousand Oaks) speaks about the economy during Friday's State of the State address held at Lost Canyons Golf Club. The local business community met last Friday afternoon to find out the condition of the state of California—and as expected, the prognosis was not good.

"The outlook for the state of the state at the moment is not good, and I think there is general consensus on that," said Assemblymember Audra Strickland (R-Thousand Oaks) at the Simi Valley Chamber of Commerce's State of the State luncheon held at Lost Canyons Golf Club.

Strickland, along with fellow Assemblymember Cameron Smyth (R-Santa Clarita) and Ventura County Supervisor Peter Foy, focused nearly all their comments at the luncheon on the economy.

Speaking to a room of about 90 people, Strickland, who represents the 37th District, opened the discussion with statistics that painted a grim picture. She said that California has a 7.7 percent unemployment rate—the highest it's been in more than a year—a home foreclosure rate that is up 228 percent from last year and a $20billion to $30billion deficit over the next 12 to 18 months.

CARISSA MARSH/Acon Newspapers TIME FOR CHANGES—Peter Foy, Ventura County supervisor, told the audience at the Chamber-sponsored event: "You must be in crisis situation to make changes." Making things worse, tax revenues are down 35 percent and capital gains tax revenues are down 55 percent, she said.

"So that's the starting point from which we have to work in order to find a solution to close the budget gap," Strickland said.

From 1996 to 2006, the state budget grew from $50 billion to $100 billion, outpacing a reasonable growth structure, said Smyth, who represents the 38th District. However, much of California's budget is constitutionally allocated by propositions and initiatives, leaving the legislature with little room to maneuver during tough times.

"We have to look at making long-term fixes to the structure of our state budget," said Smyth, who added that a constitutional reserve and spending cap are needed.

Supervisor Foy said he sees the current financial storm as a chance to make necessary changes

"In this kind of situation, you do have opportunity. You must be in crisis situation to make changes," Foy said. "It's not going to happen when we're fat and happy."

Strickland said the state has three options for solving its budget woes, but no option is easy: cut spending, raise taxes or do a combination of the two.

But with California families and businesses already struggling to make ends meet, Strickland said, she wants to find other solutions besides raising taxes.

"There's not a shortage of taxes on the people of California," she said. "So what we need to do is focus on how to spend those dollars better."

That means streamlining the budget, paring down government and reducing costs while still funding public safety and education, she said.

Smyth said the state needs to do a better job of attracting businesses and keeping them in California. He said it is frustrating when he sees companies moving out of state because it's cheaper elsewhere.

While some cuts are necessary on the local and state level, Foy said, not everything has to be a cutback. He said savings can be found simply by being more efficient.

"Let's take what we already do and do it better. And I think the state has to look at that," he said.

Locally, Foy said the county is in good shape and far from the condition it was in years ago when it was "borrowing money to stay alive."

"We've got a lot of money in reserves," he said, "but we're not going to touch our reserves this year. We are going to balance our budget without the reserves."

Foy added that with the state preparing for a $20billion budget deficit each year for the next five years, now is not the time to be dipping into rainy day funds.

With the mayor and three City Council members in the audience, both Foy and Strickland commended the city of Simi Valley for its leadership and foresight.

"They have shown fiscal restraint, discipline, have set aside money and, unlike the state, aren't looking for you to bail them out," Strickland said.

Mayor Paul Miller expressed concern that the state would not be able to solve its budget problems because of the partisanship in Sacramento.

"At this point in time, I'm probably more discouraged than anything else because I don't think what they come up with is going to be good," Miller said. "And that's to be expected because, given the amount of debt, there's got to be some pain felt somewhere."

As a former Santa Clarita City Council member and mayor, Smyth said he knows how the cities feel as they try to balance their budgets without knowing what the state is going to do and how it is going to affect them.

He said he will not balance the state's budget by taking from local government's coffers.

"Just because the state doesn't have its act together, the counties and cities shouldn't pay the price for that," Smyth said.

The fact that the audience did not hear a clear solution to the state's financial worries did not surprise the mayor.

"They had nothing definitive to say simply because there is nothing yet to report," Miller said. "That's the problem. It's all up in the air."