That's a great lead in for something that contrasts fact and theory. Unfortunately....

> You can look at California as an example of this. The populace have voted on referendum after referendum to pass new laws without passing the budget to match

That's simply not true. The referendum-required spending is a small fraction of CA's budget.[1]

The closest thing to an exception is that 50% of the budget has to go to education. However, that doesn't mandate a level of spending.

Even if CA had a huge amount of voter-mandated spending, that doesn't justify or require other spending.

CA has a budget problem because its income tax system is fairly volatile because it is very progressive. (Property tax receipts, thanks to prop 13, is actually fairly stable.) That's a problem because the governor and legislature see good years as opportunities to increase spending, which can't be paid for when bad years come along.

When I lose income, I cut back. CA govt doesn't. (And no, increases in unemployment compensation aren't the problem.)

[1] I'm ignoring the bond measures because they're put on the ballot by the legislature and required for all significant borrowing. The relevant projects aren't referendum-spending.