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We need a Consitutional Amendmend to the state, that will roll back and cap state expenditures and taxation to about $60 Billion a year. Thereafter it can only rise by the rate of inflation, plus a mulitiple to account for population (If the population goes down, so does the spending).

We had just such a proposition (the adjust for inflation/population part, anyway) in Proposition 4, which passed in 1979. Following is the summary (from California Ballot Propositions Database).

LIMITATION OF GOVERNMENT APPROPRIATIONS. INITIATIVE CONSTITUTIONAL AMENDMENT.

Establishes and defines annual appropriation limits on state and local governmental entities based on annual appropriations for prior fiscal year. Requires adjustments for changes in cost of living, population and other specified factors. Appropriation limits may be established or temporarily changed by electorate. Requires revenues received in excess of appropriations permitted by this measure to be returned by revision of tax rates or fee schedules within two fiscal years next following year excess created. With exceptions, provides for reimbursement of local governments for new programs or higher level of services mandated by state. Financial impact: Indeterminable. Financial impact of this measure will depend upon future actions of state and local governments with regard to appropriations that are not subject to the limitations of this measure.

Unfortunately, it hasn't acted as much of a brake on state spending. Here's what a Claremont Institute Report, California's Fiscal Condition (Google cache: the original seems to be gone from the Claremont site) said about Prop 4's limits:

A third element in the taxpayer's triad of defense was a constitutional provision of more recent origin. In 1979, voters approved Proposition 4, better known as the Gann Spending Limit, which placed a flexible restraint on the total amount of funds the government could spend without voter approval. The limit was hardly draconian (it expanded with population and inflation), and from 1979 to 1990 allowed state general fund spending to increase from $12.6 billion to $31.2 billion in current dollars.
In 1988 and 1990, Propositions 98 and 111 changed the formula for calculating Gann, sending the spending limit into the upper stratosphere of government finance, where it still orbits unobtrusively today. For example, Proposition 111, which the Legislature titled a "Transportation Improvement and Spending Limitation Act," increased the spending ceiling by $53.3 billion over a decade for purposes unrelated to transportation.