Political Landscape:

California’s expected deficit of $21 billion in mid-2011, projected by the California legislative analyst’s office on Wednesday, was a signal to lawmakers that the state’s spending habits remain flawed, even after recent budget fixes, they said.

The state’s fiscal troubles will not end this year, with the deficit continuing to fall $20 billion short of California’s annual spending requirements unless significant budgetary changes are made, according to a report from the office.

Lawmakers on Wednesday were critical of the state’s failed attempts to solve budget problems over the last year, even as they had been a part of the body that oversaw that effort.

With tax revenues down, some turned their attention to the state’s business climate.

“When you see the economy still not turned around, we have record unemployment here in California and until the Legislature is willing to improve the business climate here in the state, as well as rein in spending, we’re going to continue to see these shortfalls for a long time into the future,” Assemblyman Cameron Smyth (R-Santa Clarita) said.

The state’s efforts to raise revenues through a sales tax hike and a jump in the vehicle license fee, among other efforts, had proven ineffective and showed that other changes were necessary, Smyth said.

“Back in February, the state Legislature passed the single largest tax increase in the state’s history and yet we’re facing a $21-billion shortfall, and I think it validates my position that instead of further taxing Californians and California businesses, we should be looking at ways to bring business back to California and helping bring more Californians back to work,” he said.

Other states and countries have been successful in luring businesses away from the state, state Sen. Bob Huff (R-Diamond Bar) said.

“If they’re not profitable then they have to decide: Can they be profitable in California or can they be more profitable in another state or country?” Huff said.

The Legislature will likely face difficult decisions, but it may be a better option to face them sooner than later, state Sen. Carol Liu (D-La Cañada Flintridge) said.