Published: Jan. 6, 2013 Updated: 6:22 a.m.

As the new year dawns, California politicians find themselves in a strange position. The economy is improving, the public is growing more optimistic, and the Democrats’ control of supermajorities in the Legislature should reduce gridlock – the one thing guaranteed to sour voters on government.

But that also means that this is the year for Democrats to produce – or stop blaming Republicans for blocking all the great things they would otherwise be doing for California.

Their to-do list is not a short one. From the state budget to tax changes, financing the schools, overhauling water policy and implementing the federal health care law, the Legislature is going to be busy this year. Lawmakers will also need to keep close watch on two risky, only-in-California projects: the construction of a bullet train and the start of the state’s market-based program to reduce greenhouse gas emissions.

Depending on how the federal budget negotiations go in Washington, D.C., lawmakers here could also be scrambling to react to cuts in federal aid and, possibly, a recession brought on by higher taxes and a blow to consumer and investor confidence.

Even with a favorable outcome in Congress, however, California’s budget is still out of whack – and that will be the first order of business for Gov. Jerry Brown and the Legislature.

The problem is relatively small compared with past years, thanks to voter approval of a tax increase in November. Overly optimistic assumptions about income tax revenue and a few unforeseen developments have left a projected shortfall of about $2 billion for the fiscal year that begins July 1.

Brown will not likely propose cuts in school spending to close that gap. He campaigned for his tax increase by warning that schools would be hit hard if the tax measure failed and voters would not take kindly to a reversal now. That means that health and welfare programs for the poor are probably in line for still more cutbacks, even after years of belt-tightening.

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