Universally criticized as wishful thinking, California's budget compromise completely fell apart in six short weeks. Heavily dependent on capital gains tax and high-income earners, the budget deficit climbed as Wall Street sank.

The governor delivered the news officially two days after the election.

Both parties trumpeted change in the November election, and fiscally speaking, the world has changed dramatically in the last two months.

California finds itself at the heart of the debacle but certainly far from the only state in trouble.

But some things don't change. The approval of the high-speed rail and the children's hospital bonds on Nov. 4 continue our pattern of borrowing for state needs. The practice is so common in California that only about 20 percent of our budget is open to negotiations; the rest is already committed to prisons, education and other pre-determined items.

The budget compromise signed in September was inadequate on its face. Accounting gimmicks which "eliminated" $6 billion of the deficit fell faster than Lehman Brothers stock price.

But when the stock market nosedived, the flaws in the budget where not only highlighted but magnified. We are already more than $11 billion in the hole for this year and next year's deficit is becoming deeper and darker by the minute.

The governor has called a special lame duck session with hopes of legislators being more in a compromising mood now that the election is over. Past performance would not bode well for his thinking.

The governor tried to balance his proposal between cuts and new revenue. His $4.5 billion in reductions include more significant cuts for the blind and disabled as well as CalWorks recipients. The biggest cut - -- $2.5 billion --- is in education.

Revenue enhancements include a temporary sales tax increase, some new service industries losing their existing exemption, increases in vehicle registration fees and an oil severance tax. Republican leaders have once again taken a "no tax" pledge.

For a really changed world, however, California leaders need to examine the following:

Change the tax structure. The state is overly dependent on taxing high-income individuals and the so-called "sin" taxes. Revenue from capital gains taxes will be a lot lower this year, but we are dependent on it in the state. Oddly, enough alcohol tax revenue has increased during the downturn.

Eliminate or significantly modify the two-thirds rule for financial decisions. California is one of only three states in the Union that requires it, and even fiscal ultra-conservatives favor the change.

The party in power, after all, will be held accountable for failure. Voters will be patient but there is a limit to how much leeway they will give a party. Fail to deliver for long enough and voters will make changes.

Modify the referendum process in the state. It is too often manipulated by individuals and interests for their own interest masquerading as the common good. For enough money any initiative can be placed on the ballot. For some more, it can be passed.

Let it stand as the people's tool of last resort for the failure our representatives. When we are forced to wield its power, let's then vote out the officials who failed to make the decision in the first place.

Exhibit leadership, not partisanship. Republicans need to learn that fiscal conservatism doesn't mean fiscal intractability. Democrats need to learn that fiscal responsibility also contributes to the common good.

The governor, for instance, has been acting as a lame duck because he has been stymied by the "powers-that-be" too often. It's a little early for lame duck status, and our action hero governor can still change that.

California could use some change for the better immediately.

Steve Pehanich is director of advocacy and education for the California Catholic Conference: www.cacatholic.org.