Agaggle of good-government activists aims to turn California’s ongoing budget crisis into an opportunity for reform in 2010.

Fat-cat corporations, political gadflies, grassroots campaigners and the state’s richest foundations are in the mix, with more than a dozen measures vying to qualify for next year’s ballot.

The Golden State is losing its glow, say initiative backers, pointing to a university system that this year broke its promise to admit all qualified Californians, while cutbacks threaten to drive the University of California system into mediocrity. Governor Schwarzenegger has proposed further reductions in K-12 education spending, already among the lowest per pupil in the country.

Because Proposition 13 caps property tax revenue, the state’s reliance on income taxes has created a boom-and-bust cycle that in lean years – like this one – had the state issuing IOUs to pay its bills as legislators locked horns along party lines during a lengthy budget impasse. The various fixes range from a convention to rewrite California’s constitution, to eliminating the two-thirds majority legislative vote now required to pass a state budget.

THE GOLDEN STATE IS LOSING ITS GLOW, SAY INITIATIVE BACKERS.

“We came to the collective realization that all of our goals weren’t as easily attainable if we continue to have a dysfunctional government,” says Amy Dominguez Arms of the James Irvine Foundation, which together with five other foundations kicked in nearly $16 million to support California Forward, whose high powered politicos, business and labor leaders hope to smash Sacramento’s partisan stalemate. One initiative does away with the two-thirds majority and requires better financial planning; another stops raids on local tax revenues except in fiscal emergencies.

The proposals are the product of bipartisan compromise, says former Santa Cruz Democratic Assemblyman Fred Keeley. But he adds they’re more revolutionary than they appear, rivaling the progressive reforms of the early 1900s, when Governor Hiram Johnson tried to break the power of California’s railroad barons by creating the current system of initiatives, referenda and recall. The populist Johnson might roll over in his grave if he knew how much direct democracy costs these days. Money, not merit, will likely determine which measures make the ballot. Keeley estimates it will cost $3 million just to gather signatures for California Forward’s proposals, and at least $15 million to win voter support.

UC Berkeley professor and liberal PR guru George Lakoff contends California Forward doesn’t go far enough. He’s launched an effort that would not only allow a budget to be passed by simple majority, but would do away with the two-thirds margin to raise taxes to end the gridlock.

Bank of America, Chevron and the American Lung Association are among the mostly deep-pocketed groups behind Repair California, which would convene a constitutional convention to re-consider California’s elections, budgeting and governance, while there’s another call for a convention at which the entire state constitution would be up for rewrite. If voters lack the patience to cut through the ballot clutter, they’ll likely vote no on everything, says former Republican political consultant Dan Schnur. “Two or more initiatives on the same subject on the same ballot have the real potential to cannibalize each other,” he says.

Oddly, the fix for so much government by initiative could be – well, in one of the convention initiatives, which would address the issue.