LOS ANGELES -- Defense spending cutbacks are proving very troublesome for California, but the state's economic outlook hinges even more on its ability to solve other basic problems, a state commission said this week.

"California's future success depends not just on how well it addresses defense cutbacks, but how government and business leaders resolve the broader and more fundamental problems that burden the state's economy," the Commission on State Finance said in a report studying the impact of defense cuts on the state.

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