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HomeMy WebLinkAboutMINUTES - 04101990 - 1.47 / �17 TO: BOARD OF SUPERVISORS Contra FROM: Phil Batchelor, County Administrator Costa April 5, 1990 '`` County DATE: C �T PROPOSITION 111, The Traffic Congestion Relief SUBJECT: and Spending Limitation Act of 1990 (SCA 1) SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION Adopt a position in SUPPORT of Proposition 111 on the June 5 , 1990 ballot which adjusts state and local agency appropriations limits, (Gann limits) , modifies the provisions of Proposition 98 regarding funds for schools and implements statutory language providing for an increase in the gasoline tax and exempting such increase from the state' s Gann spending limit. BACKGROUND Proposition 111 results from the passage by the Legislature of Senate Constitutional Amendment (SCA) 1 which is now Resolution Chapter 66, Resolutions of 1989 . In addition the implementation of AB 471 (Chapter 106, Statutes of 1989) was made contingent on the passage of SCA1 by the voters. AB 471 actually provides for the increase in the gas tax but without the passage of SCA1 exempting the increase from the State' s Gann spending limit it would not be possible to spend the money raised by the additional gas tax revenue. Proposition 111 would make the following changes: 1. The measure requires that the calculation of the Gann spending limit be reviewed as part of local governments ' annual financial audits. Yes % CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURES: ` � L// ACTION OF BOARD ON pr 1 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS 1 HEREBY CERTIFY THAT THIS IS A TRUE 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: ATTESTED APR 10 1990 Please see Page 3 . PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) DEPUTY 2 . The measure changes the manner in which any revenue in excess of the State' s Gann spending limit is disposed of. Currently all money in excess of the State' s Gann spending limit goes to the schools until they have received a specified amount of money. Any balance is then returned to the taxpayers. Proposition 111 would allow excess revenues received in one year to be set aside and used in the following year if revenues are sufficiently below the limit that year. Any excess revenue after this two year averaging would be split between school and taxpayers with 50% going to schools and 50% being returned to the taxpayers. For example, in Year 1, revenues exceed the limit by $300 million. The $300 million is set aside for a year. In Year 2, revenues are determined to be below the limit by $400 million. Since over the two-year period revenues in total are $100 million below the limit ($300 million above averaged with $400 million below) , the $300 million from Year 1 may be appropriated. As another example, in Year 1, revenues exceed the limit by $500 million. In Year 2, revenues are below the limit by $300 million. Of the $500 million in excess revenues from Year 1, $300 million may be appropriated. The remaining $200 million in revenues which are in excess of the limit for two years would be split between schools and taxpayers, with each receiving $100 million. 3. Currently, the appropriations limit of a government agency may be exceeded in the event of an emergency, but the appropriations limits for the next three years must be reduced to offset the amount by which expenditures exceeded the limit due to the emergency so there is no aggregate increase in appropriations. Proposition 111 would revise this to provide that if the Governor declares an emergency, appropriations approved from an emergency account by a 2/3 vote of the governing body would not count as an appropriation subject to. the limit and thus no reduction in future limits would have to be made. An emergency declared only by a local governing body would still require that future appropriations limits be reduced so there is no aggregate increase. 4. Under current law the appropriations limit of each entity of government is adjusted annually by the entity' s population change and by a cost of living factor. The cost of living factor is the lower of the change in the U.S. Consumer Price Index or California per capita personal income. Proposition 111 eliminates the U. S. Consumer Price Index and would use only the California per capita personal income as the adjustment factor for the State' s Gann spending limit. 5. Proposition 111 also allows local governments to use as their cost of living factor either California per capita personal income or the change in the local assessment role for nonresidential new construction. 6. For the State, Proposition 111 also adjusts the factors used to measure population changes to include not only statewide population changes but also changes in the K-12 and community college average daily attendance. Approximately 600 of the population change will be based on changes in the general populations and approximately 40% will be based on the changes in the K-12 and community college average daily attendance. 7. Proposition 111 excludes from the Gann spending limit qualified capital outlay projects. Qualifying projects are -3- defined in subsequent legislation (SB 88) which is presently pending final approval in the Legislature. 8. Proposition 111 excludes from the Gann spending limit any revenue from gasoline taxes above 9 cents per gallon. The above changes would take effect for the 1990-91 fiscal year. The changes in the calculation of the Gann spending limit would begin with the 1986-87 limit and be rolled forward to the 1990-91 limit. 9. . Currently schools (as a result of Proposition 98) receive either 400 of the State' s General Fund or the amount of funding they received in the prior year, increased by increases in enrollment and the change in the Gann cost of living factor. Currently the cost of living factor is the lower of the change in the U. S. Consumer Price Index or California per capita personal income. Proposition 111 changes the method of calculating the cost of living adjustment for schools 10. Currently any funds allocated as a result of the State' s revenues exceeding its Gann spending limit are built into the schools ' funding base so that the base funding for the following year equals the amount that schools got plus the surplus from the revenues over the Gann limit, even if revenues for the subsequent year are below the Gann spending limit. Proposition 111 amends this section to provide that such allocations are one-time in nature and do not increase the funding base for the schools in future years. 11. Proposition 111 also implements portions of AB 471 (Chapter 106, Statutes of 1989) . The portions which would be implemented by the passage of Proposition 111 include the following: . * The development, adoption and updating of a Congestion Management Plan, as defined in AB 471. * An increase in the gasoline tax from 9 cents per gallon to 14 cents effective August 1, 1990 and an additional one cent beginning January 1, 1991 and each year thereafter until the tax equals 18 cents per gallon on January 1 , 1994 . * An increase in commercial vehicle weigh fees. In view of the need for funding for a wide variety of transportation projects in this County and elsewhere in the State and in view of the need to make adjustments to the Gann spending limit it is recommended that the Board of Supervisors indicate its support for Proposition 111. cc: Each Board Member County Administrator Larry Naake, Executive Director, CSAC Les Spahnn, SRJ. Jackson, Barish & Associates D.J. Smith, D.J. Smith Associates Executive Director, Metropolitan Transportation Commission Public Works Director Community Development Director Executive Director, Contra Costa Transportation Authority