A new constitution would make sense. In DC, financial matters cannot be challenged by referendum or proposed by initiative. Compare the results. The fact that Proposition 187 was overturned by the Courts was a good thing. It was blatantly unconstitutional. Whether it would have helped the budget crisis is immaterial. Ultimately, spending and funding source must be rationalized. While it is an article of faith that money is fungiable, it need not be. Education should be supported by either a personal income tax or an indirect business income tax, rather than property taxes. Income redistribution programs should also be married into that tax so that every worker is assured a living wage for his or her family. This tax should also fund remedial education and job training programs and plan participants should be paid while in class (or on a waiting list to start class). Participants should receive the same child tax credit that workers receive. Property taxes should fund public safety and mental health care services, from the national guard to housing inspections to the local group home, as well as any local road maintenance not funded by gas taxes. Sales taxes or a VAT should fund commercial regulation and general government. They should be the visible part of the invisible business income tax. It may be that remedial educaton and training are paid from this tax rather than the business income tax - it all depends on whether participants first find an employer-sponsor or whether the program is administered by the state or charitable organizations operating under state contracts. The rule of thumb should be that if the money must go through the treasury, the sales tax or VAT is appropriate. If it can be paid as a tax benefit, the business income tax is appropriate. The state income tax should cover just high income individuals and should be concentrated on paying back and maitaining the debt. It should include a charitable contribution deduction and an exclusion for assets sold to an ESOP, but have few other deductions, if any. It should also capture inherited wealth when liquidated, regardless of source (meaning that trust fund income should be taxable).