In the 1960s, California gained reverence for its reputation as a great, promising state. The increase in population and massive advertising have helped highlight this notion. However, in 2011, California no longer enjoys the same reputation in the eyes of its residents. With a current state deficit of $25.4 billion, many Californians believe the state is hopeless and can never regain its former celebrity. Renowned historian Kevin Starr argues that California has completely lost its promise; However, California has not entirely lost its promise because it is still the eighth largest economy in the world. California can function even with a dysfunctional government and institutional structure. California still has the potential to reclaim its reputation as a great, up-and-coming state. By addressing the state's dilemma, we are able to understand why and how California lost its greatness. Once we analyze the state's core problems, such as the initiative process, the state legislature, and public misrepresentation, we will have a better understanding of how to address the issue. First, an obvious problem of the state is the use of the initiative process. Originally, it gave “Californians the power to propose constitutional amendments and laws that fellow citizens will vote on without the involvement of the legislature (Van Vechten, 20).” However, today, special interest groups have misused this process. In fact, initiative campaigns have become an industry unto themselves in California. According to Mathews and Mark, “in 1996, annual spending on initiative campaigns in California exceeded $140 million (Mathews and Mark, 68).” Special interest groups that are financially well below the average of 38 million people, California still has the potential to be great. In fact, if California were to lose its promise, the state would not have such a large population nor would it be the eighth largest economy in the world. California's problem lies in its legislative structure, institutions and practices. There is unchecked power given to the people through the initiative process and there are fundamental structural flaws in the state legislature. By addressing these issues and thinking critically about what needs to be reformed, California can potentially restore its old reputation. However, we must reform without unconsciously changing the right things in our state. If California reforms as it did in the past, the state's future could be ruined. Innovative means of solution are needed to push the state in the right direction.