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Initiative Update:
Measure to Stop Excessive Government Spending Cleared for Signature-Gathering

An initiative sponsored by CalTax, the Howard Jarvis Taxpayers Association and the Small Business Action Committee to keep the Legislature from approving excessive spending has been cleared for signature-gathering, the secretary of state announced February 7.

Proponents have until July 6 to collect 807,615 valid signatures to qualify the measure (11-0092) for the November ballot.

The initiative will update the existing Gann Limit to ensure that as California's economy recovers and state tax revenue grows, the money no longer will be spent faster than it comes in, and will prioritize use of revenue in excess of the limit. The proposal also gives taxpayers additional protection by clarifying the legislative vote requirement for taxes.

Attorney General Kamala Harris prepared the following official title and summary for the initiative:

"GOVERNMENT SPENDING LIMITS. INITIATIVE CONSTITUTIONAL AMENDMENT. Resets state spending limit to fiscal year 2010-11 level. Requires state and local governments spend tax revenue exceeding limit to repay debt when debt is 5 percent or more of their spending limit. When state debt is less than 5 percent of state spending limit, splits excess revenue between schools and budget reserves or taxpayer refunds, depending on amount. When local government debt is less than 5 percent of applicable spending limit, returns excess revenue to taxpayers. Requires constitutional amendment to change terms. Forecloses Legislature's imposition, authorization, or submission to voters of tax increase absent two-thirds vote. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: For state government, a much greater likelihood that spending will be constrained by the constitutional spending limit. Consequently, state spending for ongoing programs—such as schools, community colleges, universities, health and social services, and corrections—may have to be reduced in certain years, potentially by billions of dollars. In addition, the measure could result in more state funding for reduction of bond debt, particularly in the near term, and in the future, more one-time funding for schools and community colleges, budget reserves, and taxpayer refunds."

February 10, 2012
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