California State Sen. Alan Lowenthal during budget talks in July. Associated Press

The prospect of more California-statehouse dysfunction this year is adding momentum to two efforts to overhaul California's budget process—including one that could rewrite much of the state's constitution.

California legislators are heading this month into what promises to be another season of bickering over the state's big budget shortfall for the current fiscal year, ending June 30, and the next. Last year, they passed two austere budgets after impasses that forced California to delay payments and issue IOUs to creditors. Credit agencies cut the state's rating to the lowest in the nation, and the California statehouse became the butt of jokes nationwide.

Two groups are pushing ballot initiatives they say would purge that chaos from Sacramento's budget process. A bipartisan group, California Forward, is pushing a reform to let legislators pass budgets by a simple majority instead of the current two-thirds threshold. Repair California, which is affiliated with a pro-business group, is gathering support to hold a constitutional convention to rewrite state laws. Such a convention could alter the budget process and other facets of governance in California.

The recession has pinched state budgets across the nation, prompting legislatures to enact tax increases and spending cuts. California has an especially tough time solving its fiscal woes because it is one of only three states that require at least two-thirds of its state legislators to approve a spending plan. That means budget negotiations usually stall as Democrats, who make up 64% of California's legislature, struggle to win Republican votes.

Prior efforts to fix California's budget process have failed. "The odds are long" for both groups, says Larry Gerston, a political scientist at San Jose State University. California ballot initiatives are tough to pass against well-funded opposition, and conservative groups say they are lining up against the measures.

Still, the groups contend that extreme voter discontent makes this time different. A recent poll by the Public Policy Institute of California, a nonpartisan think tank, shows that 83% of likely voters believe the state's budget situation is a big problem.

"People are much angrier about California government than they've ever been in recorded polling history, and because there's a critical mass of reform measures on the ballot, they're less likely to get lost in the shuffle," said Thad Kousser, a political-science professor at Stanford University's Bill Lane Center.

California Forward hopes to place a measure on the November ballot that would alter the budget process both for the state and local governments. It would let state legislators pass budgets by a simple majority, while maintaining the two-thirds vote requirement to raise taxes. The measure would also institute what is known as a pay-as-you-go system, in which lawmakers must identify funding sources for any new programs.

"We just have to stop the madness of these IOUs being issued and these horrible budget delays," said Bob Hertzberg, a former Democratic speaker of the California Assembly who is co-chair of California Forward. "It sends a message...that California is dysfunctional."

The local-government part of the proposal would make it easier for municipalities to raise sales taxes, by one percentage point, to fund education and other services. It would also prohibit the state from tapping the coffers of local governments during budget emergencies, as it did last year.

Repair California proposes measures to organize a constitutional convention for 2011 to discuss altering the state's governing efficiency and structure, electoral system and budget process. The resulting proposals would be bundled into a single initiative for a statewide election in 2012.

Statehouse Republicans will fight California Forward's initiatives, said Tony Strickland, the state Senate's Republican assistant minority leader. If the budget-approval threshold is lowered, then Republicans would lose their outsized influence in the statehouse because Democrats could pass budgets without GOP votes. The California "Central valley, the farmers, agriculture"—constituencies typically represented by Republicans—"will lose their voices," Mr. Strickland said.

The antitax Howard Jarvis Taxpayers Association will oppose any effort that would ease local governments' ability to raise taxes, said Jon Coupal, the group's president. He and Mr. Strickland said they will also oppose Repair California's constitutional convention because it could result in a repeal of Proposition 13, a 32-year-old law that caps property-tax rates.

John Grubb, Repair California's campaign director, acknowledged the challenges, but said there is now a window of opportunity for major reform. "All the easy answers have already been exhausted,'' he said.

Write to Stu Woo at