While they grumbled about money woes outside, inside the building Republicans warned about another looming crisis: public pensions.
"The current government worker program we have is unaffordable, unsustainable and if it continues unchanged, it will lead to fiscal ruin for California," state Senator Dennis Hollingsworth (R-Murrieta), the senate minority leader.
The California Foundation for Fiscal Responsibility says more than 9,000 retired government employees, mostly public safety officers, receive more than $100,000 per year in pensions. More than 3,000 retired teachers or school administrators are in the same club. When you add in the rest of the retirees, pensions cost the state $3 billion a year.
Governor Schwarzenegger threw his support behind Hollingsworth's new bill, that includes raising the retirement age and making workers contribute more to their retirement.
"Paying those pension promises is already crowding out funding for higher education, for parks, and other areas like healthcare and so on," said Schwarzenegger.
The proposal only affects new hires.
Still, current state workers oppose it. They point out those high pensions are unusual, and most accept lower pay in exchange for better benefits. They think wealthy people like the governor are the problem.
"The people who are holding this state together with their labor and sacrifice is not the issue. It's his friends with the yachts and the boats that are not paying their taxes," said Rob Robbins, a Service Employees International Union (SEIU) member.
Public employee unions have stymied past efforts to reform the public-pension system, so this year may be another uphill battle.
"The public sector unions in California are very powerful entities, that's partially because they have a lot of money to spend on politics," said Derek Cressman, California Common Cause.
A recent report by the California Fair Political Practices Commissions shows that public employee and teachers unions have spent $300 million over the last decade to influence public policy, the most of any lobbying group.