Assembly Member DeMaio's proposed constitutional amendment aims to restructure California's state budget process through three primary mechanisms: capping total annual labor costs, mandating competitive sourcing for state services, and instituting a two-thirds legislative approval requirement for both the state budget and new program fees.

The measure would modify current budget procedures, which require only a simple majority vote for passage by June 15 each year. Under existing law, state agencies must obtain at least three competitive bids for contracts, but the proposal would expand this requirement by constitutionally mandating that agencies competitively source or contract out their services. The amendment would also introduce new constraints on state labor expenditures through an unspecified cap on total annual costs.

The constitutional changes would affect multiple stakeholders within state government. Agencies would need to adapt their contracting and service delivery models to meet expanded competitive sourcing requirements. Legislators would face a higher threshold for budget and fee approval, requiring broader consensus across party lines. State employees and contractors would operate under new labor cost limitations and competitive bidding mandates.