The tarnish on the Golden State

California is really suffering in this recession, and all of the emergency financing initiatives on Tuesday's ballot were defeated. The state is now close to not being able to pay its bills, and calls for a state constitutional convention are growing louder:

As the notion of California as ungovernable grows stronger than ever, Mr. Schwarzenegger, a Republican, has expressed support for a convention to address such things as the state’s arcane budget requirements and its process for proliferate ballot initiatives, both of which necessitated Tuesday’s statewide vote on budget matters approved months ago by state lawmakers.

“There could not be more of a tipping point,” said Jim Wunderman, chief executive of the Bay Area Council, a business group that moved forward on Wednesday with plans to push for a constitutional convention. “We think the interest is going to grow by orders of magnitude now.”

More immediately, Mr. Schwarzenegger met with legislative leaders to begin the painful process of slashing state spending after voters rejected five ballot measures intended to balance the budget through a mix of tax increases, borrowing and the reallocation of state money.

Back in February, Ezra Klein summed up California's structural money problems:

California effectively has four branches of government: The governor, the legislature, the courts, and the ballot initiatives. And these last have ripped through our finances.... The legislature cannot reject the initiatives, but both their bills and the ballot proposals are coming from the same pool of money....

And we're looking at a considerable sum that's out of their [legislative] control. Last August, Mark Paul estimated that these programs were now equivalent to about 9% of the total general fund, "or about the total cost of all of today's state social service programs."

Then, of course, is the second problem: The legislature effectively can't raise revenues. Taxes require a 2/3rds majority and California's Republicans are mono-maniacally anti-tax. It is, after all, the only thing they can control. So essentially, California operates with a government that can't control either spending or revenues.

More on the budget cuts expected to close the state's $21 billion shortfall from the Los Angeles Times.