Source: Norimitsu Onishi, New York Times ( Free Registration )

After years of ballooning budget deficits, California finally seemed on firmer footing. Unemployment remained high, but revenues and housing prices were up. Taxpayers even voted themselves a tax increase to bring deficits down.

And then came the automatic federal budget cuts known as sequestration.

Read Full Article: California, on brink of recovery, braces for setback on federal aid