It's really no surprise both houses of the Legislature rejected the proposed $11 billion in spending cuts. Even Republicans who have been pushing for severe reductions for years wouldn't vote for it because it doesn't solve the entire deficit.
"Today, we are voting on a $11 billion solution to a $24 billion problem," said Senate Majority Leader Dennis Hollingsworth.
It was a move that upset Democrats who themselves found it difficult to vote for deep cuts that mostly affect the poor, their core constituents.
"If cutting where we have consensus was good enough in January, why isn't it good enough in June, as we are a week away from IOU's and a potential fiscal meltdown?" said Senate President Darrell Steinberg.
Meltdown is right -- the state treasury is on pace to run out of cash in five weeks.
State Controller John Chiang just issued a warning to lawmakers that if a budget revision isn't passed by July 2nd, California will have to pay its bills with IOUs.
"This is very serious. This is the next step after cash deferrals and the step before the state defaulting," said Chiang.
Local governments, for example, wouldn't get their state money for social services. They're already struggling with cash problems of their own.
"If we get IOUs from the state, that's just going to be like zero. It's just a piece of paper, it's just evidence of fiscal failure," said San Jose Mayor Chuck Reed.
Lawmakers will try again. Protesters from several school districts across California worry that lawmakers are only concentrating on a budget revision that considers only cuts.
"It not only hurts employees that work at the schools, but it also hurts the children. It's devastating. It's disastrous," said special ed. teaching assistant Melissa Marshall.