The California Constitution says that the Legislature "shall not, in any manner, create any debt or debts" greater than $300,000, unless such an obligation is for a "single object or work" and is approved by a vote of the people. The only exception is in case of war, "to repel invasion or suppress insurrection."

The pending recall election aimed at Gov. Gray Davis might be considered an insurrection, I suppose. But I don't think that such a threat is the kind of exception the framers had in mind when they prohibited the Legislature from using borrowed money to pay for the ordinary, ongoing expenses of state government.

Yet the budget passed last week and signed Saturday by Davis is built upon a $10.7 billion bond measure to finance the state's accumulated budget deficit. These bonds, to be repaid over five years, are in an amount far greater than $300,000. They will not be used for a "single object or work," such as building a school or buying parkland. And they will not be submitted to a vote of the people.

How then, can the bonds possibly be legal? Some people, not surprisingly, think they are not. The Pacific Legal Foundation has threatened to sue the state to halt plans to sell the bonds without a vote.

"There are big dangers in letting the state pile up debt in order to pay off bills," said Harold Johnson, a lawyer for the foundation. "Giving politicians this new tool -- the red ink option -- for funding their wish lists threatens to put the state on a fast track to bankruptcy. That's why the state constitution's framers insisted that voters should have a say when politicians are tempted to go on a borrowing binge."

Johnson points to early state Supreme Court decisions in which the justices said such borrowing violated the constitution. The framers, the court said in 1857, knew that "if they permitted the Legislature to borrow money to defray the ordinary expenses of the government, it would not be long before the state must be brought practically to rely upon the yearly revenue."

California's founders, in other words, foresaw and sought to prevent a generation of lawmakers who would become addicted to their credit card. In addition to this practical concern, the court said, the framers thought it unjust to "throw the burden of paying the present expenses of government upon posterity."

Why? Because future citizens would be compelled to pay the debt, in addition to their own expenses, "or resort to the same method of postponement."

More recent decisions have chipped away at this principle. The courts have approved borrowing for cash flow purposes, to even out the state's income and expenses within a single fiscal year. They have also looked the other way at borrowing that bridges dips in revenues between fiscal years. But a five-year, $10.7 billion bond measure to pay for operating expenses is unprecedented in scope and duration.

The Legislature's lawyer, in an opinion issued earlier this year, suggested that such borrowing would be illegal. She said she thought the courts would not approve a general obligation bond to finance state government, even if it were approved by the voters. She suggested that the Legislature could ask voters to amend the constitution to allow borrowing for operating expenses at the same time voters were asked to approve the sale of the bonds.

Instead, the Legislature, working with the governor, devised a scheme to get around the constitutional requirement. The idea has won the blessing of Attorney General Bill Lockyer and a private law firm that specializes in public finance. These lawyers are so confident of their position that they assured the state the bond measure is safe even without a "validation case" in which the state itself would seek the blessing of a court in advance for what it intends to do.

In short, the state will borrow the money and then set up a special fund into which will be deposited enough money each year to retire the bonds. Technically, each year's repayment -- about $2.5 billion -- will not go forward unless the Legislature approves it as part of the budget. And if a future Legislature declined to take this action, the bondholders would not have a legal claim on the state's general fund. It is not a debt, the lawyers say, because the taxpayers will not be bound to repay it.

It is, in effect, a handshake deal between the bond buyers and the current Legislature and governor.

Trust us, the state leadership is saying. And their implication is this: No future Legislature and governor would dare go back on this understanding, because to do so would ruin the state's credit for years to come. So it binds the state morally if not legally.

This is a risky proposition, for both the state and the bond market. In the short term, it's likely to be quite expensive because the bond buyers will insist on being compensated with a higher interest rate for the extra risk they are taking.

In the long-term, the state's citizens might pay an even greater price, if they lose control of how their government is financed.