As a deal stalled over school funding cuts, warnings sounded about rising state debt and falling bond ratings.
The state's budget is in shambles, but candidates are already lining up for the 2010 gubernatorial race. They include San Francisco Mayor Gavin Newsom and former eBay chief Meg Whitman.
A $28 billion budget shortfall through 2010 could start to pinch next week.
Used-car dealers, small manufacturers feel credit squeeze as states and cities postpone projects.