HomeMy WebLinkAboutMINUTES - 03151988 - T.2 THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY, CALIFORNIA
Adopted this Order on March 15, 1988 by the following vote:
AYES: Supervisors Powers, Fanden, McPeak, Torlakson
NOES: None
ABSENT: Supervisor Schroder
ABSTAIN: None
SUBJECT: Government Spending Initiative and Accountability
Act of 1988 - Proposition 71
The Board this date endorsed the Government Spending
Initiative and Accountability -Act of 1988, as recommended by the
Finance Committee.
Paul Katz, representing Contra Costa Employees
Association Local 1, commented on efforts throughout the County to
support the Initiative, now numbered as Proposition 71. Mr. Katz
also commented on Proposition 72, amending the Gann Limitation,
which would commit all highway users ' tax and gasoline sales tax
funds to a special transportation fund. He noted that if
Proposition 72 passes there will be a loss of considerable funds
to the State General Fund, and urged the Board to oppose
Proposition 72.
IT IS BY THE BOARD ORDERED that the presentation by Mr.
Katz is ACKNOWLEDGED.
I hereby certify that this is a true and correct copy of
ars action taken and entered on the grin ter of Zhe
Board of Supervisors on Cho date shown.,,
ATTESTED: �AhGGZ /T /f 98
i:'6 11- SATCHIELICR, ^ierk of the Board
of Supervic,ors ana County Administrator
G��
By , Deputy
CC: County Administrator
T i .G•
,r
ATO- BOARD OF SUPERVISORS
Finance Committee
FROM: Supervisor Nancy FandenContra
Supervisor Tom. PowersCosta
DATE: February 23, 1988
SUBJEc'tbVERNMENT SPENDING INITIATIVE AND ACCOUNTABILITY ACT OF 1988
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION•
Endorse the "Government Spending Initiative and Accountability Act" of
1988 .
FINANCIAL IMPACT:
Endorsement of this measure will not have direct financial impact on the
County. However, since it has the effect of easing some of the restraints
now placed on counties and cities to spend the proceeds of taxes, it is
possible that its passage could ultimately assist the County in having the
legal flexibility to provide all the services possible with the dollars
available.
If the measure does not pass, many counties and cities will continue to
face the current problem of exceeding their "Gann Limits" , resulting in
costly elections to increase limits or returning funds to taxpayers coupled
with the loss of the services those refunds would have provided.
BACKGROUND:
The attached report and analysis provides details about this initiative as
well as the other Gann Initiative on the June ballot. Because of some of
the positive features about the Government Spending Initiative and
.Accountability Act, the Finance Committee recommends that the full Board
endorse it. Additionally, the Committee has requested that Paul Katz of
Local 1 make a presentation to the Board on this issue at your March 15
meeting.
Attachment
CONTINUED ON ATTACHMENT. YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD CO IT EE
APPRO OTHER
SIGNATURE S : =Supekvisor Nancy Fanden Su rvi o o. Powers
ACTION OF BOARD ON - � 5=Rg.. A-PROVED AS RECOMMENDED OTHER
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
X UNANIMOUS (ABSENT. ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
cc: Auditor-Controller ATTESTED .—
County Administrator
Treasurer Tax Collector PHIL BATCHELOR, CLERK OF THE BOARD OF
Local 1 SUPERVISORS AND COUNTY ADMINISTRATOR
BY
M382/7-83 _,DEPUTY
Attachment III
MTC
METROCENTER
T E T Itc)hOI I r0.N 101 8TH STREET
• Tlt•1\�MISSPORT TI N MEMORANDUM OAKLAND, CA -7700
C t) .�1 �1 1 > ti l () N (415) 464-7700
To: Commission Date: 10/28/87
Fr: William R. "Bill" Lucius, Chair W '
Legislation and Public Affairs Committee "
Re: Gann Limit Voter Initiatives
Recommendation Support efforts to bring the Californians for Quality
Government initiative before the voters
Discussion There are two initiatives currently being circulated that
effect the Gann limit and transportation funding.
One, sponsored by the California Tax Reduction Movement, has
been organized by Paul Gann. It would accomplish the
following:
1 . Maintain current Gann Limit formula.
2. Define gas taxes as user fees, thus exempting them from the
spending limit restrictions.
3. Define sales tax on gasoline as a user fee and require that
these funds be used for transportation
purposes (phased in
over a three-year period) .
4. Establish a state emergency reserve fund equal to 3 percent
of the General Fund budget. Appropriations made to the
reserve will not be subject to the spending limit.
5. Allow appropriations to be made from the reserve (equal to
2 percent of General Fund) for emergency purposes if
approved by two-thirds legislative vote and the Governor.
Such appropriation would be exempt from the state spending
limit.
6. Require that the Governor annually calculate the spending
limit.
7. Allow any taxpayer to challenge the Governor's calculation.
The other initiative is sponsored by Californians for Quality
Government and has been associated with Bill Honig,
Superintendent of Public Instruction.
It would:
1 . Change the formula used to compute the annual state
spending limit. Currently the spending limit is adjusted
annually by a factor no greater than the increase in the
• i
cost of living plus the increase in population. This.
initiative would redefine the cost of living to be the
greater of the C.P. I . index or per capita personal income
in California. It would also redefine population for other
than school districts to reflect daytime work force
population in computing the limit.
2. Designate the Commission on State Finance to compute the
limit.
3. Define gas taxes under Article XIX of the Constitution as
user fees, making them exempt from the spending limit.
_Discussion Both initiatives would define gasoline taxes and vehicle fees
as user fees, exempting them from the spending limit
restrictions. However, the initiative sponsored by the
California Tax Reduction Movement would also include the sales
tax on gasoline and diesel as user fees, phasing them in over
three years. Revenues generated from the Bradley-Burns 1% tax
and the 1/4 cent TDA sales tax on gasoline and diesel would
continue to go to the counties.
The most significant difference between the two initiatives
has to do with their treatment of the state's spending limit.
The Californians for Quality Government proposal revises the
manner by which the limit is calculated from the lesser of the
cost of living plus any increase in population to the greater
of the CPI index or per capita personal income in California.
This would allow the state's spending limit to increase in the
future based on real income growth as well as increases in the
cost of living.
The Gann-supported initiative would retain the current formula
for calculating the state spending limit, but would provide a
small 3% cushion by declaring that the state's 3% emergency
reserves could be maintained with appropriations not being
subject to the spending limit. However, appropriations from
the emergency reserve up to 2% of the General Fund would be
counted under the limit unless approved by a 2/3 vote of the
Legislature and the Governor. Currently, the state's
emergency reserve is counted within the state's appropriations
limit.
If both initiatives are successful in getting on the ballot
and both receive a majority vote, any conflicting provisions
would be decided in favor of the initiative that receives the
larger number of votes. The result could be an amalgram of
both initiatives, should both qualify and receive a majority
vote.
Because the initiative sponsored by Californians for Quality
Government would result in increasing the state appropriation
(Gann) limit and by so doing facilitate future increases of
state funding for transit operations (which cannot be funded
from the gas tax) as well as declaring gas taxes as user fees
and removing them from the state appropriations (Gann) limit,
LPAC recommends that the Commission support efforts to bring
this initiative before the voters.
1033d/54-5
Initiatives to Amend Gann Expenditure Limits
On Government Spending
Two organizations are currently gathering signatures to qualify for the June
1988 ballot separate initiative measures regarding Gann expenditure limits.
Both initiatives have provisions which address transportation financing, as
outlined below. The text of the initiatives and a chart comparing the provi-
sions of each are provided as attachments.
Government Spending Limitation and Accountability Act
This initiative is proposed by Californians for Quality Government, a coalition
of local government, education, transportation, and public employee groups.
The main purpose of the initiative is to revise the manner in which the Gann
limit is calculated to "reflect the real growth of California's economy and the
needs of its citizens." The initiative also exempts Article XIX funds from the
Gann limit by treating them as user fees.
Under the provisions of Article XIIIb of the State Constitution, appropriations
limits for the state and other governmental entities are increased each year to
reflect changes in "cost of living" and "population." Currently the limits
attributable to "cost of living" are increased each year based on the lesser of
the change in the U.S. Consumer Price Index (CPI) or the' change in per capita
personal intone in California. This initiative would redefine "cost of living"
as the greater of the change in the California CPI or per capita personal
income. The initiative would also redefine local government "population" to
reflect increases within the jurisdiction.
The measure would also define Article XIX taxes on motor vehicles and motor
vehicle fuels as user fees and, thus, exempt these revenues from the appropria-
tions limit.
Analysis
The Legislative Analyst and Director of Finance have estimated the fiscal
impact to be an increase in the state's appropriation limit of $800 million
(approximately 2.5%) in 1989 and by increasing amounts thereafter. The impact
on the appropriations limits of .other public entities (which includes BART) is
not determined because the population adjustments will differ among localities.
The direct impact on BART would be to increase the District ' s appropriation
limit as a result of the change in definition of "cost of living" and possibly
as a result of population changes. In addition, the initiative would impact
BART indirectly. First, the removal of the gas tax from the Gann limit would
permit the Legislature to increase the gas tax without a vote of the electorate
to adjust the appropriation limit. Any increase in the gas tax would provide
funds for Article XIX purposes, which include mass transit quideway projects.
Second, increasing the state's appropriation limit would ease constraints on
programs funded by the State General Fund, such as the Transportation Planning
and Development Account.
'
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Paul
2-
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' Gann improvementf of 1988
This initiative is being sponsored by the Committee for California's Future, a
group chaired by Paul Gann and Joel Fox, chairman of the California Tax
Reduction Movement /late Howard Jarvis' group). Designed to "update the Gann
limit" , supporters of the measure believe it is needed to "guarantee that a
strong and reasonable spending limit remains in force."
� The initiative makes several changes related to transportation revenues. Cur-
rently all motor vehicle and motor vehicle fuel excise taxes are dedicated to
Article XIX transportation purposes: highway, street and quideway projects.
. This measure would include net revenues from sales taxes on motor vehicle fuels
' (currently going into the General Fund) as dedicated funds for Article XIX
' transportation purposes, phasing them in over three years. The initiative then
defines all vehicle related fees and taxes (motor vehicle and motor vehicle
fuel taxes and sales taxes on gasoline) as user fees, thus exempting them from
the appropriations limit. The Legislature would be prohibited from reducing
the rate of local sales taxes imposed under the Bradley-Burns law and a 2/3
vote of the Legislature or a majority vote of the electorate would be required
to raise Article XIX motor vehicle taxes. An emergency reserve fund equal to
3% of the General Fund budget would be required. Appropriations from the
reserve for urgent and unexpected needs (up to 2% of the General Fund budget)
will not be subject to the limit.
Analysis
'
The impacts of this initiative are subject to different interpretations. The
Legislative Analyst has listed several major fiscal impacts, including possibly
substantial increases in the appropriations authority as a result of the
reserve fund. The Analyst also estimates that the sales tax and
transportation-related revenue provisions Of this measure would 'result in an
increase in the State's appropriations authority of at least $690 million in
1988-89 and decreasing amounts annually thereafter.
Another issue is the shift of revenues from the General Fund to
. transportation-related programs resulting from the dedication of motor vehicle
fuel sales taxes to transportation. The loss to the General Fund and corre-
sponding gain to transportation programs is estimated to be $710 million in
I991-92, after the measure is fully phased-in. The General Fund loss could be
offset, to the extent that state revenues are sufficient.
�
one issue of concern is the potential negative effect on TDA funding. Cur-
rently, 1/4 cent of the sales tax is used to fund the TDA program" which was
enacted by 8 law which extended the sales tax to gasoline to provide funding.
For administrative ease the 1/4 cent of sales tax was used fnr TDA and the
sales tax on fuel revenues went to backfill the General Fund~ If the sales tax
on gasoline is now designated as a user fee, there is concern that legislators
will be reluctant to fund TDA from General Funds. Although Gann states his
intention to secure local governments/ share of sale; tax revenues against
maneuvering by the legislature and to protect state programs remaining under
the Gann limit against any loss, there is disagreement on the strength of the
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prot�con~ .
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The major impact on BART of this initiative would be as a result of shifting
sales tax on motor vehicle fuel revenues from the General Fund to Article XIX.
This $710 million would increase Article XIX by about one-third and would like-
ly result in more money available to the Transit Capital Improvement Program,
one source of state funding for BART projects. One negative impact would be
the loss of diesel sales tax revenues as a source of funds for TP&D. These
revenues, amounting to $55 million this year, are earmarked for TP&D.
Staff Recommendation
Because both initiatives could be of benefit to BART, staff recommends the
Board support both measures.
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