Some of the posts below, and the comments to them, have brought up what I think is California's greatest scourge - the initiative.
Originally, this was created by progressives at the start of the 20th Century as a balance to the entrenched conservative interests that ran the state up until then. Sinclair Lewis was running for governor (he lost), and entrenched conservative interests stopped him. Out of this was born some of the progressive changes to California that exist to this day - the chief one being the initiative process. (I realize that this is a very sketchy description of how the process came to be, I only mention it at all to note the dichotomy of the fact that it was created by progressives, and has since been used to great effect by conservatives).
The most well known proposition in California's history was Proposition 13, which slashed property taxes, rolling them back to their 1975 rate, and it put a cap on spending and taxation, making it impossible to raise taxes in the state without a 2/3 majority in the legislature. It also capped individual property taxes on a property so that the properties assessed value could only go up 2% per year (starting over again every time it sold). Conservative proponents said that the liberals were being Chicken Little, claiming all sorts of ills like closing of parks and after school programs, summer schools, cutting local governments and services to the bones, etc....
Perhaps the biggest mistake of the Democrats running the legislature in 1978 was that they tried to accommodate those cuts and make do, rather than cut government as dramatically as it should've been cut commensurate with the degree of cuts made. They resorted to gimmicks, created a lottery, cut things slowly, raised fees, but the fact of the matter is, California is a shell of it's former self due to Prop 13. Schools have never recovered, infrastructure is much worse, after school programs were dropped, and kids formed their own after school programs without any supervision (there's no doubt, growing up in California, that I can tie the rise of gangs to the late 1970s, and early 1980s, as Prop 13 took full effect.
The reason it was a mistake not to cut everything was because it would've let people see the quick results of their visceral votes at the ballot box. People thought they were sending a message, but they still wanted infrastructure, services, schools, and things of the like. In other words, they were able to make a 2 second protect, and screw over the state as a result.
Other initiatives have quickly followed, but the crime initiatives have been the ones that have really wreaked havoc on the state. As Dennis has written about below, and as others are commenting on, we have passed a series of initiatives that have essentially mandated huge increases in prison and crime budgets - often so that we can imprison 40 year old men for the rest of their life for stealing things or using drugs. The men - no longer a physical danger to others - have old convictions but have grown out of their violent phases. This is no concern to the people who helped push the original 3 Strikes (although, it should be noted that the grandfather of the murdered girl Polly Klaas, in who's name 3 Strikes was pushed through, has come out against these applications, indicating that he never thought the purpose of 3 strikes was to put away non-violent offenders for life).
Other initiatives preceded and succeeded 3 Strikes, such as a recent one which mandates lifetime GPS tracking of sex offenders, and prohibits them from living within a huge distance of schools and parks. This has been pushed in other states with disastrous effect, something that is happening here now. People who have been forced to register now can't live in places they've lived for a long time, and they can't even live in whole cities. They've been forced in many cases into homelessness, they've lost jobs, they've been pushed underground, and the stability that helped ensure that they would not re-offend has been taken away. Many feel no need to continue fighting the demons that they thought they had vanquished - life in prison is no different than the lives they're now leading. This, of course, will lead to greater sex crimes (whether this will make the proponents of these measure happy or sad is debatable - to the extent that any sex offender does not re-offend, he is a walking example of everything the tough of crime people having said as being incorrect. If they were leading good lives, get pushed into homelessness by these laws, and re-offend as a result, the laws' proponents will be able to say "see, I told you so." So, I'm not sure what the goal is among the measure's proponents).
All in all, the ability of lawmakers to sit down and say "what is best for California," "what is working, what isn't working, and what can we change" is impossible. The reality is that all levels of government are hamstrung by these initiatives, and no area is hit as badly as the criminal justice system. The prison system may go into a receivership soon because it is so big, so unmanageable, and so expensive. The result is that a federal referee overseeing the system may take over the system, force the government to give the system $5 billion more, or start releasing huge numbers of criminals from prison. I can assure you he will not do it in the most careful manner, checking to see which are the most violent, which should not be there in the first place, which should be first in line.
The reason is because people are so easily bamboozled by the titles of initiatives, by simple advertising (remember what Dennis said about the 3 strike initiative in 2004 and Arnold's commercials against it), and they lack the sophistication to read through the initiative and understand what it says. The result is government by 30 second sound bite on TV 3 weeks before the election. It has not served this state well.