Wow, they're really going to argue that this is about costs? :|
I think the real problem is that there's still a state government. The people who know how to balance the budget best and know what needs/wants they need to fulfill are the people in local communities and counties. Give them more power to deal with the budget and make the state government a council of delegates from each of those counties and you won't have much of a problem anymore.
Indeed, in their guise of “Publius” in the “Federalist Papers”, Madison and Hamilton warn against the dangerous “passions” of the mob and the threat of “minority factions” (ie, special interests) seizing the democratic process.
They wanted a republic where representatives were accountable to their constitutients. That doesn't happen anymore. Too often do representatives ignore the ideas and opinions of their constituents. A representative should be asking his constiuents wtf to do instead of being completely autonomous (except on election day). The minority factions are the representatives themselves which is why it's very important to keep any and all direct democracy actions.
Initiatives should be far harder to introduce. They should be shorter and simpler, so that voters can actually understand them. They should state what they cost, and where that money is to come from. And, if successful, initiatives must be subject to amendment by the legislature.
So give less voice to the people who actually make up the state. Shorter and simpler because people are dumb? Why not make them longer with more arguments to support them, or have them written in 2-3 different ways as a counter to any biased/emotionally-heavy language?
The initiatives are voted on on a state-level. It's difficult to estimate costs on something like that and it's difficult to say where the money will come from. I guess it's a good idea though because then the marijuana legalization initiative could say "this will cost $0, and will earn us $X".
They shouldn't be subject to amendment by the legislature. They should be subject to amendment by the citizens. That might curb any special interest group bullshit.