As far as the problem being obvious to "everyone not in Sacramento," clearly you are wrong because here we are, and the voters of California played an active role in bringing us here.

I have a friend who recently bought a house and his property taxes are like rent, it is just that expensive. He could rent a 1 bedroom apartment with his property taxes.

Money is coming in but as you said, too much money is being spent (through ballot intiatives (high speed rail for example) and the legislature gone-wild. But I believe that the gone-wild days have come to an abrupt end and mostly thanks to Schwarzenegger who has nothing to loose by being rational.

Yes, his property taxes are probably higher than they would be without Proposition 13, because he's subsidizing those around him who have owned their homes for twenty or thirty years, and aren't paying their fair share.

If property taxes on residences are too high, they should be lowered across the board. Of course, this means that either spending will need to be lowered, or the money will need to be gained through some other form of taxation.