The recession has left California, the most populous state in the U.S. and the eighth largest economy in the world, reeling. The latest budget cuts $8.5 billion from education and $2.3 billion from health care. California's governance problems, however, reach back decades; ever since 1978, Proposition 13 has capped property taxes. The fiscal situation is made even more dysfunctional by the requirement that two-thirds of the state Legislature approve any budget, giving the Republican minority disproportionate power.