Why is collective action important in government?

Take the state of California for example. The state government allows for citizens to vote directly on some parts of their budget but mainly spending. The government proposes say 15 new government programs a year. Some for the elderly, some for health care, some for education, and some for the environment. Each program has great benefits for the community so citizens vote for the ones they feel most passionately about. What ends up happening is most all programs pass which appears to be a good thing but the government has no way of coming up with the hundreds of millions of dollars to fund these programs. Now California is bankrupt and cannot afford to have any programs. If the legislature or communities got together and discussed the most vital program and lets say only chose two or three, those programs would most likely succeed and the collective action problem solved