California officials will also have to keep a close eye on decisions emanating from Washington, D.C. Federal spending cuts could slow California's economy.
"There are still risks out there that are out of the state's control," said H.D. Palmer, a spokesman for the state Department of Finance.
Federal policy makers are now facing many of the same issues -- spending cuts, tax increases, safety net reforms -- that plagued California for years. Perhaps they can take a lesson about making those tough choices -- and the payoff you get when you do.