Bill Text: CA SCA14 | 2011-2012 | Regular Session | Introduced
Bill Title: Expenditure limitations.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2012-02-02 - Referred to Coms. on B. & F.R. and E. & C.A. [SCA14 Detail]
Download: California-2011-SCA14-Introduced.html
BILL NUMBER: SCA 14 INTRODUCED
BILL TEXT
INTRODUCED BY Senators Cannella, Berryhill, Emmerson, and Harman
JUNE 28, 2011
A resolution to propose to the people of the State of California
an amendment to the Constitution of the State, by amending Section 12
of Article IV thereof, by repealing and adding Article XIII B
thereof, and by amending Sections 8, 8.5, and 20 of, and adding
Section 21 to, Article XVI thereof, relating to expenditure
limitations.
LEGISLATIVE COUNSEL'S DIGEST
SCA 14, as introduced, Cannella. Expenditure limitations.
(1) The California Constitution prohibits the annual
appropriations subject to limitation, as defined, of any entity of
state or local government from exceeding its adjusted annual
appropriations limit and provides for the disposition of excess
revenues received by the state, as specified. The California
Constitution also establishes the Budget Stabilization Account,
commonly known as the rainy day fund, in the General Fund, and
requires the Controller, no later than September 30 of each year, to
transfer from the General Fund to the account a sum equal to 3% of
the estimated amount of General Fund revenues for the current fiscal
year. This transfer of moneys is not required, unless otherwise
directed by the Legislature by statute, in any fiscal year to the
extent that the resulting balance in the account would exceed 5% of
the General Fund revenue estimate set forth in the Budget Bill for
that fiscal year, as enacted, or $8 billion, whichever is greater.
This transfer of moneys may also be suspended or reduced for a fiscal
year, as specified, by an executive order issued by the Governor.
This measure would repeal the existing provisions imposing annual
appropriations limits. Commencing in the 2013-14 fiscal year, the
measure would instead impose an annual state expenditure limit based
on total expenditures in the prior fiscal year, excluding specified
amounts allocated to school districts and community college districts
to meet a constitutional minimum funding obligation, from General
Fund revenues and special fund revenues, adjusted for the percentage
change in state population and the percentage change in the cost of
living, as specified. The measure would authorize the expenditure
limit to be exceeded for an emergency, as defined, declared by the
Governor, not including revenue shortfalls, excessive spending, or
other similar conditions limiting the ability to fund government
operations. The measure would require the Director of Finance to
report quarterly on the state's compliance with the expenditure
limits for the current fiscal year.
This measure would provide for the state expenditure limit
discussed above to become permanently inoperative on the date that
the Director of Finance determines that (A) the state's Budget
Stabilization Account, which the measure would rename as the Budget
Stabilization Fund, has a balance at least equal to 10% of the
estimate of General Fund revenues, (B) all remaining current and
future obligations from state budgetary debt, as defined, have been
reduced to zero, and (C) the state is no longer deferring payments,
as defined. Upon making this determination, the Director of Finance
would be required to so notify the Joint Legislative Budget
Committee.
The provisions governing the Budget Stabilization Fund, as
modified by this measure, would continue in operation after the state
expenditure limit becomes inoperative, as discussed above. This
measure would prohibit funds from being deposited into the Budget
Stabilization Fund in any fiscal year in which all remaining
obligations from state budgetary debt have not been reduced to zero.
This measure would also provide that the transfer of moneys from the
General Fund to the Budget Stabilization Fund is not required in any
fiscal year to the extent that the resulting balance in the fund
would exceed 10% of the General Fund revenues estimate set forth in
the Budget Bill for that fiscal year, as enacted, and would delete
the alternative $8 billion limit on the fund. This measure would
provide that, apart from a transfer made for the purpose of
responding to an emergency declared by the Governor, as defined, or a
loan to meet General Fund cash requirements which would be repaid
within a fiscal year, the total amount that may be transferred from
the Budget Stabilization Fund to the General Fund for any fiscal year
shall not exceed the lesser of the shortfall amount for the current
fiscal year, as defined, or 50% of the balance of the Budget
Stabilization Fund, depending upon specified criteria.
In addition, this measure would create in the General Fund the
Supplemental Budget Stabilization Account and would direct the
Controller to transfer, on October 1 of each year beginning in 2013,
from the Budget Stabilization Fund to the Supplemental Budget
Stabilization Account a sum equal to 1.5% of the estimated amount of
General Fund revenues for the current fiscal year, except that this
transfer would not be made in a fiscal year for which funds were not
required to be deposited into the Budget Stabilization Fund, as
specified, or for which the Governor issues an executive order to
suspend or reduce the transfer of moneys from the General Fund to the
Budget Stabilization Fund. The measure would permit appropriations
to be made from the Supplemental Budget Stabilization Account only
for capital outlay purposes or to retire bonded indebtedness of the
state.
After the state expenditure limit described above becomes
inoperative, the measure would provide for the calculation of
"unanticipated revenues" for each fiscal year, and would authorize
those revenues to be used only to meet constitutional school funding
obligations, for deposit in the Budget Stabilization Fund, and for
other specified purposes, in a specified order of priority. For
purposes of this calculation this measure would require the Director
of Finance, on or before the May 29 preceding each fiscal year to
report to the Legislature and the Governor (A) an estimate of the
amount of General Fund revenues, transfers, and balances available
from the prior fiscal year for the current fiscal year, (B) the
revenue forecast amount, as defined, for the current fiscal year, and
(C) an estimate of specified General Fund obligations for the public
schools.
(2) The California Constitution requires that whenever the
Legislature or any state agency mandates a new program or higher
level of service on any local government, the state shall provide a
subvention of funds to reimburse the local government for the costs
of the program or increased level of service. For the 2005-06 fiscal
year and every subsequent fiscal year, for a mandate for which the
costs of a local government claimant have been determined in a
preceding fiscal year to be payable by the state pursuant to law, the
Legislature is required to either appropriate, in the annual Budget
Act, the full payable amount that has not been previously paid, or
suspend the operation of the mandate for the fiscal year for which
the annual Budget Act is applicable in a manner prescribed by law.
This measure would prohibit a claim from being filed for
reimbursement for any mandate if the mandate has been in effect for
more than 2 years and no claim for that reimbursement was filed in
that period.
This measure would provide, as to specified mandates, that if the
Legislature fails to either appropriate funds or suspend a mandate,
any affected local government may commence an action in court for
relief for the purpose of securing its rights pursuant to these
provisions and, if that relief is granted in a final decision of a
court of competent jurisdiction from which no further review is
available, would require the state to provide the same subvention as
is required by that court to any other local government that has a
substantially similar claim or claims pending against the state.
This measure would also provide that any taxpayer shall have
standing to bring a legal action against the state for violating any
of these provisions, subject to specified criteria.
(3) The California Constitution establishes a minimum funding
requirement for moneys to be applied by the state for the support of
school districts and community college districts based on one of 3
tests in any given fiscal year (Proposition 98). The first test
applies, to the amount of General Fund revenues that may be
appropriated pursuant to Article XIII B of the California
Constitution, the percentage of General Fund revenues that were
appropriated for school districts and community college districts in
the 1986-87 fiscal year. The 2nd and 3rd tests compute the minimum
funding requirement based on the allocations to school districts and
community college districts from General Fund proceeds of taxes
appropriated pursuant to Article XIII B of the California
Constitution, adjusted for changes in enrollment, cost of living, or
per capita General Fund revenues, in the prior fiscal year.
This measure instead would base these computations on the amount
of General Fund revenues that may be expended pursuant to Article
XIII B of the California Constitution, in accordance with the changes
to that article discussed above.
(4) The California Constitution requires the Governor to submit to
the Legislature, within the first 10 days of each calendar year, a
proposed budget for the ensuing fiscal year containing itemized
statements for recommended state expenditures and estimated state
revenues. The California Constitution prohibits the Legislature from
passing, and the Governor from signing, a Budget Bill that would
appropriate from the General Fund a total amount that, when combined
with all appropriations from the General Fund for that fiscal year
made as of the date of the Budget Bill's passage, and the amount of
any General Fund moneys transferred to a reserve account, exceeds
estimated General Fund revenues for that fiscal year. The estimate of
General Fund revenues is required to be set forth in the Budget
Bill.
This measure would require the Governor, in his or her proposed
budget, to identify estimated total state resources available to meet
recommended state expenditures and, further, to identify the amount
of those resources that are anticipated to be one-time resources. The
measure would prohibit passage of a Budget Bill that appropriates an
amount that, when combined with prior appropriations and transfers
to the reserve account, exceeds the estimate of General Fund
revenues, transfers, and balances available from the prior fiscal
year. The measure would require the estimate of General Fund
revenues, transfers, and balances to be set forth in the Budget Bill.
(5) This measure would state that its provisions are severable.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
WHEREAS, This measure shall be known and may be cited as the
"Government Overspending Prevention Act"; and
WHEREAS, The state and its political subdivisions continue to
suffer chronic budget deficits, and the existing state and local
appropriations limits have failed to prevent this from occurring; and
WHEREAS, These budget deficits are the result of politicians
failing to responsibly manage state finances, enact budgets limited
to available revenues, and set aside a portion of the surpluses
during good fiscal years to ensure stable government resources in the
lean fiscal years; and
WHEREAS, Between the 1998-99 and 2007-08 fiscal years, state
spending was allowed to grow from just over $75 billion to over $145
billion, even though revenues were not available to support the
increased spending; and
WHEREAS, To support the unrestrained spending growth, politicians
raided revenues from local governments, enacted new and expanded
taxes disguised as fees, and pursued massive borrowing, the costs of
which will be borne by future generations; and
WHEREAS, Proposition 13 and Proposition 26 require that increases
in state taxes be adopted by not less than a two-thirds vote of the
members elected to each house of the Legislature, and Proposition 13,
Proposition 26, and Proposition 218 require that increases in local
taxes be approved by the voters; and
WHEREAS, The Government Overspending Prevention Act will force
rational fiscal management on state politicians by limiting the
growth in state spending to the combined growth of population and
inflation, and local governments will be prohibited from spending
beyond their available revenues; and
WHEREAS, The increasing interdependence of state and local
finances necessitates limitations on the expenditures of both
because, without state and local limitations restraints on spending,
one level of government could be circumvented and nullified by
increasing expenditures by another; and
WHEREAS, For all these reasons, the Government Overspending
Prevention Act will provide better fiscal management for the
taxpayers of California; and
WHEREAS, The Government Overspending Prevention Act shall be
liberally construed to effectuate its purpose of ensuring that the
state enact responsible, balanced budgets that are sustainable over
time within available resources; now, therefore, be it
Resolved by the Senate, the Assembly concurring, That the
Legislature of the State of California at its 2011-12 Regular Session
commencing on the sixth day of December 2010, two-thirds of the
membership of each house concurring, hereby proposes to the people of
the State of California, that the Constitution of the State be
amended as follows:
First-- That Section 12 of Article IV thereof is amended to read:
SEC. 12. (a) Within the first 10 days of each calendar year,
the Governor shall submit to the Legislature, with an explanatory
message, a budget for the ensuing fiscal year containing itemized
statements for recommended state expenditures and estimated
total state revenues resources
available to meet those expenditures . If recommended
expenditures exceed estimated revenues
resources , the Governor shall recommend the sources from which
the additional revenues resources
should be provided. The itemized statement of estimated total
state resources available to meet recommended expenditures submitted
pursuant to this subdivision shall identify the amount, if any, of
those resources that are anticipated to be one-time resources.
(b) The Governor and the Governor-elect may require a state
agency, officer or employee to furnish whatever information is deemed
necessary to prepare the budget.
(c) (1) The budget shall be accompanied by a budget bill itemizing
recommended expenditures.
(2) The budget bill shall be introduced immediately in each house
by the persons chairing the committees that consider the budget.
(3) The Legislature shall pass the budget bill by midnight on June
15 of each year.
(4) Until the budget bill has been enacted, the Legislature shall
not send to the Governor for consideration any bill appropriating
funds for expenditure during the fiscal year for which the budget
bill is to be enacted, except emergency bills recommended by the
Governor or appropriations for the salaries and expenses of the
Legislature.
(d) No bill except the budget bill may contain more than one item
of appropriation, and that for one certain, expressed purpose.
Appropriations from the General Fund of the State, except
appropriations for the public schools and appropriations in the
budget bill and in other bills providing for appropriations related
to the budget bill, are void unless passed in each house by rollcall
vote entered in the journal, two-thirds of the membership concurring.
(e) (1) Notwithstanding any other provision of law or of this
Constitution, the budget bill and other bills providing for
appropriations related to the budget bill may be passed in each house
by rollcall vote entered in the journal, a majority of the
membership concurring, to take effect immediately upon being signed
by the Governor or upon a date specified in the legislation. Nothing
in this subdivision shall affect the vote requirement for
appropriations for the public schools contained in subdivision (d) of
this section and in subdivision (b) of Section 8 of this article.
(2) For purposes of this section, "other bills providing for
appropriations related to the budget bill" shall consist only of
bills identified as related to the budget in the budget bill passed
by the Legislature.
(f) The Legislature may control the submission, approval, and
enforcement of budgets and the filing of claims for all state
agencies.
(g) For the 2004-05 fiscal year, or any subsequent fiscal year,
the Legislature may not send to the Governor for consideration, nor
may the Governor sign into law, a budget bill that would appropriate
from the General Fund, for that fiscal year, a total amount that,
when combined with all appropriations from the General Fund for that
fiscal year made as of the date of the budget bill's passage, and the
amount of any General Fund moneys transferred to the Budget
Stabilization Account Fund for that
fiscal year pursuant to Section 20 of Article XVI, exceeds General
Fund revenues , transfers, and balances available from the prior
fiscal year for that fiscal year estimated as of the date of
the budget bill's passage. That estimate of General Fund revenues
, transfers, and balances shall be set forth in the budget
bill passed by the Legislature.
(h) Notwithstanding any other provision of law or of this
Constitution, including subdivision (c) of this section, Section 4 of
this article, and Sections 4 and 8 of Article III, in any year in
which the budget bill is not passed by the Legislature by midnight on
June 15, there shall be no appropriation from the current budget or
future budget to pay any salary or reimbursement for travel or living
expenses for Members of the Legislature during any regular or
special session for the period from midnight on June 15 until the day
that the budget bill is presented to the Governor. No salary or
reimbursement for travel or living expenses forfeited pursuant to
this subdivision shall be paid retroactively.
Second-- That Article XIII B thereof is repealed.
Third-- That Article XIII B is added thereto, to read:
ARTICLE XIII B
STATE EXPENDITURE LIMIT
SECTION 1. As used in this article, the following terms have
the following meanings:
(a) "Emergency" means the existence, as declared by the Governor,
of conditions of disaster or of extreme peril to the safety of
persons and property within the State, or parts thereof, caused by an
attack or probable or imminent attack by an enemy of the United
States, epidemic, fire, flood, drought, storm, civil disorder,
earthquake, or volcanic eruption. "Emergency" does not include
revenue shortfalls, excessive spending, or other similar conditions
limiting the ability to fund government operations.
(b) Except as specifically excluded in this article, "General Fund
revenues and special fund revenues" means state revenues that are
generated by any tax as that term is defined in subdivision (b) of
Section 3 of Article XIII A, and any other source of state revenue
that was considered a "General Fund" or "special fund" source of
revenue for the 2010-11 fiscal year. "General Fund revenues and
special fund revenues" do not include revenues from nongovernmental
cost funds, as defined by the Director of Finance or his or her
successor, federal funds, trust and agency funds, retirement funds,
enterprise funds, or proceeds of state general obligation bonds. It
is the intent of this subdivision to ensure that all state revenues
received in any fiscal year and not specifically excluded by this
article, whether or not characterized by any state law as General
Fund revenues or special fund revenues, are subject to the
expenditure limit prescribed by this article.
(c) "Percentage change in the cost of living" means the percentage
change from April 1 of the immediately preceding calendar year to
April 1 of the current calendar year in the California Consumer Price
Index for all items, as determined by the Department of Industrial
Relations or its successor, but not to exceed the percentage change
in California per capita personal income for the immediately
preceding calendar year. The Department of Finance, or its successor
agency, shall determine the change in per capita personal income
based upon the California personal income statistics compiled by the
Bureau of Economic Analysis in the United States Department of
Commerce, or its successor agency. For purposes of this subdivision,
"current calendar year" means the calendar year in which the fiscal
year commences.
(d) "Percentage change in state population" means the change in
population of the State as determined by the Department of Finance,
or its successor agency, revised, as necessary, to reflect the
periodic census conducted by the United States Department of
Commerce, or its successor agency.
SEC. 2. (a) (1) (A) For the 2013-14 fiscal year and each
subsequent fiscal year, the total expenditures made from General Fund
revenues and special fund revenues, in the aggregate, shall not
exceed the expenditure limit for that fiscal year computed pursuant
to paragraph (2).
(B) For purposes of this article, "the total expenditures made
from General Fund revenues and special fund revenues, in the
aggregate" shall not include the amount allocated in a fiscal year to
school districts and community college districts to fund the minimum
funding obligation set forth in Section 8 of Article XVI.
(2) The expenditure limit for the 2013-14 fiscal year and each
subsequent fiscal year shall be computed by multiplying the total
expenditures from General Fund revenues and special fund revenues, in
the aggregate, for the immediately preceding fiscal year by the sum
of one plus the percentage change in state population, and
multiplying that product by the sum of one plus the percentage change
in the cost of living.
(3) For purposes of establishing the expenditure limit for the
2013-14 fiscal year and each subsequent fiscal year, the Director of
Finance, or his or her successor, shall certify the total amount of
expenditures from General Fund revenues and special fund revenues, in
the aggregate, for the immediately preceding fiscal year. The amount
certified shall not be greater than the expenditure limit for that
fiscal year under this article.
(b) The expenditure limit imposed by this article may be exceeded
for a fiscal year to address an emergency. Any such excess
expenditure made to address an emergency shall first be paid from any
funds accumulated in the Budget Stabilization Fund created by
Section 20 of Article XVI. Any expenditure exceeding the expenditure
limit imposed by this article that is made to address an emergency
shall be for that purpose only, shall be directly related to the
emergency, and shall not exceed the costs necessary to address the
emergency. Funds expended pursuant to this subdivision shall not
supplant or replace funds previously appropriated to any state
agency. Expenditures in excess of the expenditure limit for a fiscal
year that are made pursuant to this subdivision to address an
emergency shall not be considered under paragraph (3) of subdivision
(a) for purposes of determining the expenditure limit for the next
fiscal year. Any bill proposing an expenditure in excess of the
expenditure limit for a fiscal year to address an emergency pursuant
to this subdivision shall contain a statement to that effect.
(c) If after the conclusion of a fiscal year the Director of
Finance, or his or her successor, determines, and so reports to the
Legislature, that the total expenditures made from General Fund
revenues and special fund revenues, in the aggregate, for that fiscal
year, not including any amount expended to address an emergency,
have exceeded the expenditure limit for that year, the expenditure
limit for the fiscal year immediately following the fiscal year for
which that determination is made shall be reduced by the amount of
the excess. In determining the expenditure limit for the fiscal year
following the fiscal year for which that reduction is made, the
amount of the reduction shall be added to the amount of expenditures
in the immediately preceding fiscal year certified pursuant to
paragraph (3) of subdivision (a).
(d) The expenditure limit otherwise calculated for a fiscal year
shall be reduced by an amount equal to the reduction, in the
immediately preceding fiscal year, in those "General Fund revenues
and special fund revenues" other than those revenues allocated to
school districts and community college districts to fund the minimum
funding obligation set forth in Section 8 of Article XVI, which
reduction resulted from the expiration of any temporary tax increase.
For purposes of this subdivision, "temporary tax increase" means an
increase in any state tax, whether by a change in the rate or method
of calculation, imposed for a limited period of time by a law enacted
or adopted on or after January 1, 2011.
(e) The Director of Finance, or his or her successor, shall on a
quarterly basis report, to the Members of the Legislature who are
members of the committee in each house that considers the budget, on
the state's compliance with the expenditure limit imposed by this
article for the current fiscal year. The report shall include updated
estimates of revenues and expenditures and the expenditure limit for
the current fiscal year. If the director, or his or her successor,
estimates that current fiscal year total expenditures may exceed the
limit imposed by this article, the report shall include
recommendations for corrective action.
(f) (1) The expenditure limit imposed by this article shall become
inoperative, for the current fiscal year and all subsequent fiscal
years, upon a determination by the Director of Finance (A) that the
state's Budget Stabilization Fund has a balance equal to 10 percent
or more of the estimate of General Fund revenues, transfers, and
balances from the prior fiscal year set forth in the budget bill for
the current fiscal year, (B) that all remaining current and future
obligations from state budgetary debt have been reduced to zero, and
(C) that the State is no longer deferring payments. Upon making this
determination, the Director of Finance shall so notify the Joint
Legislative Budget Committee.
(2) As used in this subdivision, "budgetary debt" means all of the
following:
(A) Bonds issued pursuant to the Economic Recovery Bond Act.
(B) Loans from special transportation funds and accounts to the
General Fund.
(C) Amounts required to be transferred from the General Fund to
the Transportation Investment Fund pursuant to subdivision (e) of
Section 2 of Article XIX B.
(D) Loans from other special funds and accounts to the General
Fund.
(E) Prior-year education funding obligations determined pursuant
to Section 8 of Article XVI.
(F) Outstanding education maintenance factor amounts pursuant to
Section 8 of Article XVI.
(G) Amounts required to meet any repayment obligations created by
the suspension of subparagraph (A) of paragraph (1) of subdivision
(a) of Section 25.5 of Article XIII.
(3) "Deferring payments" means the payment, on a temporary basis,
of a state obligation in a fiscal year subsequent to the fiscal year
in which the payment would otherwise be made pursuant to law.
(g) On and after the date that the expenditure limit imposed by
this article becomes inoperative pursuant to subdivision (f), Section
21 of Article XVI shall become operative and Section 20 of Article
XVI shall continue to be operative.
SEC. 3. As used in Section 7.5 of Article IV, "the percentage
increase in the appropriations limit for the State established
pursuant to Article XIII B" means the percentage increase in the
state expenditure limit established pursuant to this article.
SEC. 4. (a) Whenever the Legislature or any state agency
mandates a new program or higher level of service on any local
government, the State shall provide a subvention of funds to
reimburse that local government for the costs of the mandate, except
that the Legislature may, but is not required to, provide a
subvention of funds for the following mandates:
(1) A legislative mandate requested by the local agency affected.
(2) Legislation defining a new crime or changing an existing
definition of a crime.
(3) A legislative mandate enacted prior to January 1, 1975, or an
executive order or regulation initially implementing legislation
enacted prior to January 1, 1975.
(b) A claim shall not be filed for reimbursement pursuant to
subdivision (a) for any mandate if the mandate has been in effect for
more than two years and a claim for that reimbursement was not filed
during that period.
(c) (1) Beginning in the 2013-14 fiscal year, the Legislature
shall either appropriate in the annual budget act reimbursement funds
for each state mandate in effect and for which reimbursement was
provided in any fiscal year prior to July 1, 2013, or it shall
suspend operation of the mandate for the fiscal year for which the
annual budget bill is applicable in a manner prescribed by law.
(2) The subvention of funds required by this section shall be
provided no later than the end of the fiscal year in which the costs
were incurred, in the case of mandates for which reimbursements have
been provided by the State in any fiscal year prior to July 1, 2013.
With regard to state mandates first imposed in a subsequent fiscal
year, and those not first reimbursed until a subsequent fiscal year,
the State shall provide a subvention of funds no later than the end
of the fiscal year next succeeding the fiscal year in which the
Commission on State Mandates, or its successor, finally determines
that the State is required to provide reimbursement.
(3) This subdivision applies to a mandate only as it affects a
city, county, city and county, or special district.
(4) This subdivision shall not apply to a requirement to provide
or recognize any procedural or substantive protection, right,
benefit, or employment status of any local government employee or
retiree, or of any local government employee organization, that
arises from, affects, or directly relates to future, current, or past
local government employment and that constitutes a mandate subject
to this section.
(d) If the Legislature fails to either appropriate funds or
suspend a mandate as required by subdivision (c), any affected local
government may commence an action in court for declaratory relief,
injunctive relief, or any other appropriate relief for the purpose of
securing its rights pursuant to this section. If a suspension of the
mandate is ordered in a final decision of a court of competent
jurisdiction from which no further review is available, the same
suspension of the mandate as is required by that court shall apply to
any other local government that has a substantially similar claim or
claims pending against the State.
(e) A mandated new program or higher level of service includes a
transfer by the Legislature from the State to cities, counties,
cities and counties, or special districts of complete or partial
financial responsibility for a required program for which the State
previously had complete or partial financial responsibility.
(f) Ad valorem property tax revenues shall not be used to
reimburse a local government for the costs of a new program or higher
level of service.
(g) For the purposes of this section, "local government" means a
city, county, city and county, school district, special district,
authority, or other political subdivision of the State, except to the
extent otherwise specified for purposes of subdivision (c).
SEC. 5. Notwithstanding any other provision of this
Constitution, any taxpayer shall have standing to bring a legal
action against the State for violating any provision of this article.
The action may seek declaratory relief, injunctive relief, a writ of
mandate, or any other relief that a court may deem appropriate. In
any such action, the State shall have the burden of proving
compliance with this article. Actions brought pursuant to this
section shall have calendar preference over all other actions.
Fourth-- That Section 8 of Article XVI thereof is amended to read:
SEC. 8. (a) From all state revenues there shall first be set
apart the moneys to be applied by the State for support of the public
school system and public institutions of higher education.
(b) Commencing with the 1990-91 fiscal year, the moneys to be
applied by the State for the support of school districts and
community college districts shall be not less than the greater of the
following amounts:
(1) The amount which, as a percentage of General Fund revenues
which that may be appropriated
expended pursuant to Article XIII B, equals the
percentage of General Fund revenues appropriated
expended for school districts and community college
districts, respectively, in the 1986-87 fiscal year
1986-87 .
(2) The amount required to ensure that the total allocations to
school districts and community college districts from General Fund
proceeds of taxes appropriated revenues that
may be expended pursuant to Article XIII B and allocated local
proceeds of taxes shall not be less than the total amount from these
sources in the prior fiscal year, excluding any revenues
allocated pursuant to subdivision (a) of Section 8.5,
adjusted for changes in enrollment and adjusted for the change in the
cost of living pursuant to paragraph (1) of subdivision (e)
of Section 8 of Article XIII B
. "Change in the cost of living," for purposes of
this section , means the percentage change in
California per capita personal income from the preceding fiscal year.
This paragraph shall be operative only in a fiscal year in
which the percentage growth in California per capita personal income
is less than or equal to the percentage growth in per capita General
Fund revenues plus one half of one percent.
(3) (A) The amount required to ensure that the total allocations
to school districts and community college districts from General Fund
proceeds of taxes appropriated revenues that
may be expended pursuant to Article XIII B and allocated local
proceeds of taxes shall equal the total amount from these sources in
the prior fiscal year, excluding any revenues allocated
pursuant to subdivision (a) of Section 8.5, adjusted for
changes in enrollment and adjusted for the change in per capita
General Fund revenues.
(B) In addition to the amount calculated in subparagraph (A)
, an amount equal to one-half of one percent times the prior
fiscal year total allocations to school districts and
community colleges from General Fund proceeds of taxes
appropriated revenues that may be expended
pursuant to Article XIII B and allocated local proceeds of taxes,
excluding any revenues allocated pursuant to subdivision (a)
of Section 8.5, adjusted for changes in enrollment.
(C) This paragraph (3) shall be operative only
in a fiscal year in which the percentage growth in California per
capita personal income in a fiscal year is greater than the
percentage growth in per capita General Fund revenues plus one half
of one percent.
(c) In any fiscal year, if the amount computed pursuant to
paragraph (1) of subdivision (b) exceeds the amount computed pursuant
to paragraph (2) of subdivision (b) by a difference that exceeds one
and one-half percent of General Fund revenues, the amount in excess
of one and one-half percent of General Fund revenues shall not be
considered allocations to school districts and community colleges for
purposes of computing the amount of state aid pursuant to paragraph
(2) or 3 (3) of subdivision (b) in the
subsequent fiscal year.
(d) In any fiscal year in which school districts and community
college districts are allocated funding pursuant to paragraph (3) of
subdivision (b) or pursuant to subdivision (h)
, they shall be (g), those districts are
entitled to a maintenance factor, equal to the difference
between (1) the amount of General Fund moneys which
that would have been appropriated pursuant to
paragraph (2) of subdivision (b) if that paragraph had been operative
or the amount of General Fund moneys which
that would have been appropriated pursuant to subdivision (b)
had subdivision (b) not been suspended, and (2) the amount of General
Fund moneys actually appropriated to school districts and community
college districts in that fiscal year.
(e) The maintenance factor for school districts and community
college districts determined pursuant to subdivision (d) shall be
adjusted annually for changes in enrollment, and adjusted for the
change in the cost of living pursuant to paragraph (1) of
subdivision (e) of Section 8 of Article XIII
B , until it has been allocated in full.
The maintenance factor shall be allocated in a manner determined by
the Legislature in each fiscal year in which the percentage growth in
per capita General Fund revenues exceeds the percentage growth in
California per capita personal income. The maintenance factor shall
be reduced each year by the amount allocated by the Legislature in
that fiscal year. The minimum maintenance factor amount to be
allocated in a
fiscal year shall be equal to the product of General Fund revenues
from proceeds of taxes that may be expended
pursuant to Article XIII B and one-half of
the difference between the percentage growth in per capita General
Fund revenues from proceeds of taxes that may
be expended pursuant to Article XIII B
and in California per capita personal income, not to exceed the total
dollar amount of the maintenance factor.
(f) For purposes of this section, "changes in enrollment" shall be
measured by the percentage change in average daily attendance.
However, in any fiscal year, there shall be no adjustment for
decreases in enrollment between the prior fiscal year and the current
fiscal year unless there have been decreases in enrollment between
the second prior fiscal year and the prior fiscal year and between
the third prior fiscal year and the second prior fiscal year.
(h)
(g) Subparagraph (B) of paragraph (3) of subdivision
(b) may be suspended for one year only when made part of or included
within any bill enacted pursuant to Section 12 of Article IV. All
other provisions of subdivision (b) may be suspended for one year by
the enactment of an urgency statute pursuant to Section 8 of Article
IV, provided that the urgency statute may not be made part of or
included within any bill enacted pursuant to Section 12 of Article
IV.
Fifth-- That Section 8.5 of Article XVI thereof is amended to
read:
SEC. 8.5. (a) In addition to the amount required to be applied
for the support of school districts and community college districts
pursuant to Section 8, the Controller shall during each fiscal year
transfer and allocate all revenues available pursuant to paragraph 1
of subdivision (a) of Section 2 of Article XIII B to that portion of
the State School Fund restricted for elementary and high school
purposes, and to that portion of the State School Fund restricted for
community college purposes, respectively, in proportion to the
enrollment in school districts and community college districts
respectively.
(1) With respect to funds allocated to that portion of the State
School Fund restricted for elementary and high school purposes, no
transfer or allocation of funds pursuant to this section shall be
required at any time that the Director of Finance and the
Superintendent of Public Instruction mutually determine that current
annual expenditures per student equal or exceed the average annual
expenditure per student of the 10 states with the highest annual
expenditures per student for elementary and high schools, and that
average class size equals or is less than the average class size of
the 10 states with the lowest class size for elementary and high
schools.
(2) With respect to funds allocated to that portion of the State
School Fund restricted for community college purposes, no transfer or
allocation of funds pursuant to this section shall be required at
any time that the Director of Finance and the Chancellor of the
California Community Colleges mutually determine that current annual
expenditures per student for community colleges in this State equal
or exceed the average annual expenditure per student of the 10 states
with the highest annual expenditures per student for community
colleges.
(b) Notwithstanding the provisions of Article XIII B, funds
allocated pursuant to this section shall not constitute
appropriations subject to limitation.
(c) From any funds transferred to the State School Fund pursuant
to subdivision (a), the Controller shall each year allocate to each
school district and community college district an equal amount per
enrollment in school districts from the amount in that portion of the
State School Fund restricted for elementary and high school purposes
and an equal amount per enrollment in community college districts
from that portion of the State School Fund restricted for community
college purposes.
(d) All revenues allocated pursuant to subdivision (a) shall be
expended solely for the purposes of instructional improvement and
accountability as required by law.
(e)
SEC. 8.5. Any school district maintaining an
elementary or secondary school shall develop and cause to be prepared
an annual audit accounting for such funds and shall adopt a School
Accountability Report Card for each school.
Sixth-- That Section 20 of Article XVI thereof is amended to read:
SEC. 20. (a) The Budget Stabilization Fund and the
Supplemental Budget Stabilization Account are hereby created in
the General Fund.
(b) In each fiscal year as specified in paragraphs (1) to
(3) (4) , inclusive, the Controller shall
transfer from the General Fund to the Budget Stabilization
Account Fund the following amounts:
(1) No later than September 30, 2006, a sum equal to 1 percent of
the estimated amount of General Fund revenues for the 2006-07 fiscal
year.
(2) No later than September 30, 2007, a sum equal to 2 percent of
the estimated amount of General Fund revenues for the 2007-08 fiscal
year.
(3) No later than September 30, 2008, and annually thereafter
through September 30, 2012, a sum equal to 3 percent of
the estimated amount of General Fund revenues for the current fiscal
year.
(4) On September 23, 2013, and on September 23 annually
thereafter, a sum equal to 3 percent of the estimated amount of
General Fund revenues for the current fiscal year, but only if on
that date all remaining obligations from state budgetary debt, as
defined in paragraph (2) of subdivision (f) of Section 2 of Article
XIII B, have been reduced to zero.
(c) The transfer of moneys shall not be required by subdivision
(b) in any fiscal year to the extent that the resulting balance in
the account Budget Stabilization Fund
would exceed 5 10 percent of the
General Fund revenues estimate set forth in the budget bill for that
fiscal year, as enacted , or eight billion dollars
($8,000,000,000), whichever is greater . The Legislature
may, by statute, direct the Controller, for one or more fiscal years,
to transfer into the account Budget
Stabilization Fund amounts in excess of the levels prescribed
by this subdivision.
(d) Subject to any restriction imposed by this section, funds
transferred to the Budget Stabilization Fund or the Supplemental
Budget Stabilization Account shall be deemed to be General
Fund revenues for all purposes of this Constitution.
(e) The transfer of moneys from the General Fund to the Budget
Stabilization Account Fund may be
suspended or reduced for a fiscal year as specified by an executive
order issued by the Governor no later than June 1 of the
preceding fiscal year the date of the
transfer set forth in subdivision (b). For a fiscal year commencing
on or after July 1, 2013, this subdivision shall be operative only if
a transfer of moneys from the Budget Stabilization Fund to the
General Fund is authorized pursuant to paragraph (1) of subdivision
(g).
(f) (1) Of the moneys transferred to the account in each fiscal
year, 50 percent, up to the aggregate amount of five billion dollars
($5,000,000,000) for all fiscal years, shall be deposited in the
Deficit Recovery Bond Retirement Sinking Fund Subaccount, which is
hereby created in the account for the purpose of retiring deficit
recovery bonds authorized and issued as described in Section 1.3, in
addition to any other payments provided for by law for the purpose of
retiring those bonds. The moneys in the sinking fund subaccount are
continuously appropriated to the Treasurer to be expended for that
purpose in the amounts, at the times, and in the manner deemed
appropriate by the Treasurer. Any funds remaining in the sinking fund
subaccount after all of the deficit recovery bonds are retired shall
be transferred to the account, and may be transferred to the General
Fund pursuant to paragraph (2).
(2) All other
All funds transferred to the account
Budget Stabilization Fund in a fiscal year shall
not be deposited in the sinking fund subaccount and may
, by statute, be transferred to the General Fund
by statute pursuant to subdivision (g) or (h) .
(g) (1) Subject to paragraph (2), the total amount that may be
transferred from the Budget Stabilization Fund to the General Fund
pursuant to this subdivision for any fiscal year shall not exceed the
lesser of the following:
(A) The shortfall amount for the current fiscal year.
(B) Fifty percent of the balance of the Budget Stabilization Fund.
(2) If a transfer was made pursuant to this subdivision in both
the prior fiscal year and the fiscal year immediately preceding that
year, the total amount that may be transferred from the Budget
Stabilization Fund to the General Fund pursuant to this subdivision
for the current fiscal year shall not exceed the shortfall amount for
the current fiscal year.
(3) For purposes of this subdivision, the "shortfall amount for
the current fiscal year" is the amount derived by subtracting the
General Fund revenues, transfers, and balances available from the
prior fiscal year for the current fiscal year from the expenditure
forecast amount for the current fiscal year.
(4) For purposes of this subdivision, "General Fund revenues,
transfers, and balances available from the prior fiscal year" for a
fiscal year does not include revenues transferred from the General
Fund to the Budget Stabilization Fund for that fiscal year pursuant
to subdivision (b).
(5) For purposes of this subdivision, Section 21, and Section 12
of Article IV, "balances available from the prior fiscal year" for a
fiscal year means the funds in the Special Fund for Economic
Uncertainties, or a successor fund, as of June 30 of the immediately
preceding fiscal year.
(6) For purposes of this subdivision and Section 21, the
"expenditure forecast amount" for the current fiscal year is the
total General Fund expenditures for the prior fiscal year adjusted
for the change in population of the State, as defined in Section 8 of
Article XIII B, and the change in the cost of living for the State,
as measured by the California Consumer Price Index, between the prior
fiscal year and the current fiscal year.
(7) For purposes of this subdivision, "total General Fund
expenditures for the prior fiscal year" does not include the
expenditure of funds transferred pursuant to subdivision (h), or the
expenditure of unanticipated revenues pursuant to paragraph (3) or
(4) of subdivision (c) of Section 21.
(h) Any funds necessary for the purpose of responding to an
emergency declared by the Governor may be transferred from the Budget
Stabilization Fund to the General Fund by statute. For purposes of
this subdivision, "emergency" has the same meaning as set forth in
subdivision (a) of Section 1 of Article XIII B.
(i) In addition to any transfer authorized by this section, funds
in the Budget Stabilization Fund or the Supplemental Budget
Stabilization Account may be loaned to meet General Fund cashflow
requirements on the condition that the funds are repaid within the
same fiscal year in which the loan is made.
(j) (1) Except as provided in paragraph (3), on October 1, 2013,
and on October 1 annually thereafter, the Controller shall transfer
from the Budget Stabilization Fund to the Supplemental Budget
Stabilization Account a sum equal to 1.5 percent of the estimated
amount of General Fund revenues for the current fiscal year.
(2) Funds in the Supplemental Budget Stabilization Account may be
appropriated only for the purposes set forth in subparagraphs (B) and
(C) of paragraph (4) of subdivision (c) of Section 21.
(3) Paragraph (1) shall not be operative in a fiscal year in which
the deposit of funds into the Budget Stabilization Fund under
paragraph (4) of subdivision (b) is not required, or for which the
Governor issues an executive order pursuant to subdivision (e) to
suspend or reduce the transfer of moneys from the General Fund to the
Budget Stabilization Fund.
Seventh-- That Section 21 is added to Article XVI thereof, to
read:
SEC. 21. (a) On or before the May 29 preceding the first
fiscal year to which this section applies, and on or before each May
29 thereafter, the Director of Finance shall do all of the following,
reporting the result in each case to the Legislature and the
Governor:
(1) Separately estimate General Fund revenues, transfers, and
balances available from the prior fiscal year for the current fiscal
year.
(2) Determine the revenue forecast amount for the current fiscal
year in the manner set forth in subdivision (d).
(3) Estimate the amount, as of that date, of any General Fund
obligations arising under Section 8 for the current fiscal year,
including any maintenance factor allocation for the current fiscal
year required pursuant to subdivision (e) of Section 8, that are
attributable to unanticipated revenues in the current fiscal year.
(b) (1) Except as provided in paragraph (2), "unanticipated
revenues" for a fiscal year, for purposes of this section, shall be
the lesser of the following:
(A) Estimated General Fund revenues for the current fiscal year
reported pursuant to paragraph (1) of subdivision (a) minus the
revenue forecast amount for the current fiscal year.
(B) Estimated General Fund revenues, transfers, and balances
available from the prior fiscal year for the current fiscal year
reported pursuant to paragraph (1) of subdivision (a) minus the
expenditure forecast amount for the current fiscal year determined
pursuant to paragraph (6) of subdivision (g) of Section 20.
(2) If the amount determined pursuant to paragraph (1) is less
than zero, the amount of unanticipated revenues shall be zero.
(c) Unanticipated revenues, as determined pursuant to this
section, may be used only for the following purposes and in the
following order of priority:
(1) Unanticipated revenues shall be appropriated to satisfy any
General Fund obligations arising under Section 8 for the current
fiscal year, as estimated pursuant to paragraph (3) of subdivision
(a).
(2) An amount shall be transferred by the Controller no later than
June 27 of the current fiscal year to the Budget Stabilization Fund,
not exceeding the amount needed to increase the balance in the fund
to an amount equal to 10 percent of the General Fund revenues
estimate set forth in the budget bill for that fiscal year, as
enacted. Notwithstanding any other provision of this Constitution,
the following shall apply:
(A) If the Director of Finance determines at any time that the
total amount of General Fund obligations arising under Section 8 for
a fiscal year, including any maintenance factor allocation for that
fiscal year required pursuant to subdivision (e) of Section 8,
exceeds the total amount of those General Fund obligations as
calculated for that fiscal year for purposes of the estimate required
by paragraph (3) of subdivision (a), he or she shall so report to
the Legislature, the Governor, and the Controller. The Controller
shall thereupon transfer funds in the amount of that difference from
the Budget Stabilization Fund to the General Fund, and the funds so
transferred shall be appropriated only for purposes of funding the
additional amount of General Fund obligations under Section 8
determined pursuant to this paragraph.
(B) If the Director of Finance determines at any time that the
total amount of General Fund obligations arising under Section 8 for
a fiscal year, including any maintenance factor allocation for that
fiscal year required pursuant to subdivision (e) of Section 8, is
less than the total amount of those General Fund obligations as
calculated for that fiscal year for purposes of the estimate required
by paragraph (3) of subdivision (a), he or she shall so report to
the Legislature, the Governor, and the Controller. The Controller
shall thereupon transfer funds in the amount of that difference from
the General Fund to the Budget Stabilization Fund, but not exceeding
the amount needed to increase the balance in the latter fund to an
amount equal to 10 percent of the estimate of General Fund revenues
as set forth in the enacted budget bill for that fiscal year. The
remaining difference, if any, may be used in the same manner as other
unanticipated revenues pursuant to paragraphs (3) and (4).
(3) An amount shall be appropriated to retire outstanding
budgetary obligations of the state. For purposes of this paragraph,
"budgetary obligations" means either of the following:
(A) Unfunded General Fund obligations pursuant to Section 8 for
one or more prior fiscal years.
(B) Any repayment obligations created by the suspension of
subparagraph (A) of paragraph (1) of subdivision (a) of Section 25.5
of Article XIII.
(4) Any remaining unanticipated revenues shall be used for one or
more of the following purposes:
(A) Transfer by statute to the Budget Stabilization Fund.
(B) Appropriation for one-time infrastructure or other capital
outlay purposes.
(C) Appropriation to retire, redeem, or defease outstanding
general obligation or other bonded indebtedness of the State.
(D) Return to taxpayers within the current or immediately
following fiscal year by a one-time revision of tax rates, or by
rebates.
(E) Appropriation for unfunded liabilities for vested nonpension
benefits for state annuitants.
(d) For each fiscal year to which this section applies, the
revenue forecast amount shall be determined as follows:
(1) The General Fund revenues for the current fiscal year shall be
forecast by extrapolating from the trend line derived by a linear
regression of General Fund revenues as a function of the fiscal year
for the period of the 20 preceding fiscal years. For purposes of this
paragraph, General Fund revenues shall exclude both of the
following:
(A) The General Fund revenue effect of a change in state taxes
that affects General Fund revenues for less than the entire period of
the 20 preceding fiscal years.
(B) Any proceeds of bonds authorized by subdivision (a) of Section
1.3.
(2) The amount forecast pursuant to paragraph (1) shall be
increased or decreased, as applicable, to reflect the net current
fiscal year General Fund revenue effect of a change in state taxes
for which General Fund revenue effects were excluded pursuant to
subparagraph (A) of paragraph (1).
(e) This section shall become operative when the expenditure limit
imposed by Section 2 of Article XIII B becomes inoperative, and
shall apply to the first fiscal year following the final fiscal year
to which that expenditure limit applied, and to each fiscal year
thereafter.
Eighth-- The provisions of this measure are severable. If any
provision of this measure or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.
