Well, that certainly is their plan ... spend themselves into oblivion, declare bankruptcy, and have the federal government (i.e., the people from the other 49 states) bail them out. If they get a clean financial slate, then they will go right back to spending themselves into oblivion, yet again.
I don't believe in "too big to fail" ... let California sink into the slimy morass made for it by its moronic Socialist/Marxist leaders.