SACRAMENTO, Calif. – On Wednesday, I attended the annual California Working Families Policy Summit, which drew 750 people, including legislators, non-profit groups and policy wonks. On our minds: what to do about California’s $26 billion shortfall as well as proposed budget cuts that will hurt working families.

Unfortunately, based on the chatter over lunch and in the hallways, families mired in the recession won’t receive respite, unless California’s governing system is changed. Take for instance, the devastating impact Proposition 13 has had on the state's economy.

Proposition 13 caps all residential and commercial property taxes. What this means is there is less money for schools and public services, less control of the budget by municipalities and more control by the state, and an unfair burden on new homeowners -- including start-up businesses.

In not making traditional companies in the state -- think Disney and other companies in southern California, for example -- pay their fair share of taxes, potential new companies face such high property taxes that they may not be able to open shop in California.

“If Disney paid the same rate on all its properties that could bring $3 million in revenue to Orange County,” said Lenny Goldberg, executive director of California Tax Reform Association.

Goldberg trotted out an impressive chart on how much revenue the state could attain simply by re-assessing commercial real estate. The Los Angeles Unified School District could gain an additional $400 million. Just making the Hilton Tower Hotel in San Francisco pay the same tax rate as the Clift Hotel would yield an additional million dollars.

Goldberg also brought up the unfair tax burden placed on new businesses in the state. For example, a locally owned gas station could pay $30,000 a year in property taxes while the Chevron across the street could be paying $10,000.

“Unless they are Costco or Wal-Mart, no one wants to buy commercial property,” he said. “They are paying full price and getting nothing in return.”

Other systematic changes legislators should make? Getting rid of the 2/3 vote requirement for approving budgets and tax increases. That, and stop letting voters pass unfunded mandates.

“Californians like to vote for initiatives, but what they don’t like to do is to pay for what they vote for,” said Mark Paul, co-author of the book California Crackup: How Reform Broke the Golden State and How We Can Fix It. “The three strikes law, Jessica’s Law, park bonds, the stem cell initiative and even Gov. Arnold Schwarzeneggar got in on the action with his own afterschool initiative. These have piled new obligations on the state budget with no way to pay for it.”

Instead, the state has resorted to borrowing money -- at the public’s expense. “Our motto is ‘We want, therefore we borrow,’” Paul said. “We used to pay our roads with a gas tax. We haven’t raised the gas tax in years so we are paying for our roads with our schools and health care.”

This can’t be more apparent than in Governor Jerry Brown’s proposed budget. It is a balanced budget in that there is almost a dollar for dollar match of tax increases with budget cuts, according to Jean Ross, executive director of the California Budget Project.

The bad news is that our most vulnerable families -- the poor and low-wage working class -- are the ones hardest hit by both tax increases and budget cuts.

If approved by the incoming legislature, Brown’s budget would eliminate childcare for 11 and 12-year-olds, limit the amount of time people can remain on public assistance, and cut some home aid for the elderly and disabled. Many of these families can expect being hit by multiple proposals, for example, seeing their monthly checks reduced and the loss of their childcare subsidies.

“Those cuts are deep and they are potentially devastating,” Ross said.

These cuts are also permanent as opposed to the tax increases, which have a five-year limit. The underlying theme of the conference seemed to be that we must convince the affluent folks -- and top companies -- in our state to pay their fair share in taxes in order to protect our families and make sure this state remains great.

“There is no vision in Jerry Brown’s budget other than we have to make the numbers work,” Paul said. “We need to make Californians understand that we are not going to have the schools we want with this governmental structure.”