The state government political procedure that would be most effective at resolving the public policy issue described in the passage is a **Referendum**.
Here's why:
1. A **Referendum** allows the voters in the state to directly vote on the proposed bill related to decreasing state funding to public schools. This aligns with the agreement mentioned in the passage that both sides believe voters should decide on the bill's approval.
2. Through a **Referendum**, the public can express their views on whether they support or oppose the proposal, providing a democratic way to resolve the disagreement within the state legislature.
3. The outcome of a **Referendum** would reflect the collective will of the voters, indicating whether the majority supports the decrease in state funding to public schools or not. This process ensures transparency and public participation in decision-making.
Therefore, a **Referendum** would be the most effective state government political procedure in this scenario as it allows the public to have a direct say in the matter, aligning with the shared agreement of both sides in the legislature.